qrc submission part 2 - queensland competition authority · the qrc’s submission on the...
TRANSCRIPT
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Contents
Table of contents
1 Background 2
2 Summary 3
3 Outline of the QRC’s submission 4
4 Overview of ongoing impacts of maintenance changes 5
5 Item 1.3: Network performance incentive 6
QRC’s views .............................................................................................................. 6 5.1
6 Item 1.4: Maintenance performance monitoring framework 7
QRC’s views .............................................................................................................. 7 6.1
7 Item 1.5: Calculation of non-coal allocations towards network maintenance 7
QRC’s views .............................................................................................................. 7 7.1
8 Item 2.1: Obligations to maintain the network and minimise disruption to train services 8
Why it is necessary to expand on the maintenance obligations in the 8.1undertaking ................................................................................................................ 8
The changes that ought to be made to the undertaking ............................................ 9 8.2
9 Item 2.2: Reporting requirements to assist access holders to identify reasons for disruption to train services 9
Why it is necessary to create additional reporting requirements on Aurizon 9.1Network under UT5 .................................................................................................... 9
The changes that ought to be made to the undertaking .......................................... 10 9.2
10 Item 2.3: Aurizon Network’s board and maintenance matters 11
QRC’s views ............................................................................................................ 11 10.1
11 Item 2.4: Supply chain coordination obligations with regard to planning and scheduling of maintenance activities 12
Why it is necessary to amend and expand on the supply chain coordination 11.1obligations in the undertaking .................................................................................. 12
The changes that ought to be made to the undertaking .......................................... 13 11.2
12 Item 2.5: Adjustments to Aurizon Network’s revenue-cap arrangements 13
QRC’s views ............................................................................................................ 13 12.1
Glossary of terms 15
Attachment 1 - QRC partial mark up of UT5 16
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1 Background
This submission is provided by the Queensland Resources Council (QRC) in response to the consultation paper released by the Queensland Competition Authority (QCA) on 29 May 2018 in relation to ‘Aurizon Network’s 2017 draft access undertaking: maintenance allowance and practices’ (Consultation Paper).
1
The QRC’s submission on the Consultation Paper is provided in two parts. On 1 June 2018, the QRC provided the first part of its submission.
2 That submission addressed the
QCA’s comments on the maintenance cost allowance (Item 1.1 and Item 1.2 of the Consultation Paper). This submission addresses the balance of the Consultation Paper, being principally the changes required to the undertaking to address the impacts of Aurizon Network’s maintenance practices.
Through the Consultation Paper, the QCA seeks further information from stakeholders in relation to a number of matters that will inform its final decision on Aurizon Network’s 2017 Draft Access Undertaking (UT5). Specifically, in item 1.3 onwards of the Consultation Paper, the QCA has requested stakeholder comments on:
Transition from actual costs to efficient costs, while maintaining network service level standards - 'network performance incentive' (Item 1.3);
Transition from actual costs to efficient costs, while maintaining network service level standards - 'maintenance performance monitoring framework' (Item 1.4);
Calculation of non-coal allocations towards network maintenance (Item 1.5);
Obligations to maintain the network and minimise disruptions to train services (Item 2.1);
Reporting requirements to assist access holders to identify reasons for disruption to train services (Item 2.2);
Aurizon Network's Board and maintenance matters (Item 2.3);
Supply chain co-ordination obligations with regard to the planning and scheduling of maintenance activities (Item 2.4); and
Adjustments to Aurizon Network's revenue-cap arrangements (Item 2.5).
The QRC thanks the QCA for the opportunity to make this submission in light of the significant and ongoing impact that Aurizon Network’s improper maintenance practices are having on the QRC’s members. Specifically, the QRC welcomes the opportunity to propose robust accountability mechanisms for UT5 to deny Aurizon Network the opportunity to repeat such conduct in the future.
The QRC is the peak representative organisation of the Queensland minerals and energy sector. The QRC’s membership encompasses minerals and energy exploration, production and processing companies and associated service companies. The QRC works on behalf of members to ensure that Queensland’s resources are developed profitably and competitively and in a socially and environmentally sustainable way.
1 See QCA Consultation Paper dated 29 May 2018.
2 See ‘QRC submission on UT5 maintenance matters’ dated 1 June 2018 available at
http://www.qca.org.au/getattachment/6892ea34-b870-45fe-8171-9ebc000aac56/QRC-submission-on-UT5-maintenance-matters.aspx.
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All operating Queensland coal producers are members of the QRC. A number of coal mining companies in the development and operating phase are also members of the QRC.
This submission has been prepared in close consultation with a number of the QRC members.
2 Summary
Aurizon Network has consistently asserted that its changes in maintenance practices are ‘prescribed’ by the UT5 Draft Decision. Despite constant appeals from industry to Aurizon Network to revert to its previous practices (on the basis that this assertion is plainly incorrect and unfounded), Aurizon Network has maintained its position. Aurizon Network has maintained a position that it openly acknowledges will have a significant impact on its customers, having stated on numerous occasions that the changes would result in:
degradation of supply chain performance;
reduction in overall system capacity; and
reduction in system throughput by approximately 20 million tonnes per annum.
The connections which Aurizon Network has attempted to create between Aurizon Network’s conduct and the QCA’s preliminary assessment of an appropriate maintenance allowance in the UT5 Draft Decision were severed when the Consultation Paper unequivocally confirmed that:
the UT5 Draft Decision ‘did not prescribe that Aurizon Network change its maintenance programme nor the operation of its maintenance practices’;
the UT5 Draft Decision ‘did not represent any final views’; and
importantly, the QCA is ‘favourably disposed to accepting Aurizon Network’s revised claim for direct maintenance costs, subject to it providing sufficient justification and evidence’.
On this basis, industry requested Aurizon Network to immediately and permanently restore its previous maintenance and operating practices.
3 To date, Aurizon Network has
not provided this confirmation.
To the contrary, Aurizon Network has continued its campaign to disrupt access in order to extract a more favourable result in relation to revenue. In a letter received by the QRC from Aurizon Network on 14 June 2018, Aurizon Network expressly stated that:
[Aurizon Network’s] decision making is affected not only by the maintenance allowance but by the total allowable revenues and the need to protect its legitimate business interests in the light of the reduced return on capital. That is a critical issue driving the reappraisal of every aspect of [Aurizon Network’s] below rail operations.
4
Aurizon Network’s improper conduct justifies significant changes to the undertaking to ensure that Aurizon Network cannot misuse its monopoly power again.
The QRC has proposed a number of amendments to the access undertaking in response to each of the items listed by the QCA in its Consultation Paper. In summary, these amendments propose:
3 See letter from QRC to Aurizon Network dated 30 May 2018.
4 See letter from Michael Riches to Ian Macfarlane dated 14 June 2018.
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more stringently defined obligations in relation to supply chain coordination, including requirements to maximise the alignment of maintenance work across the elements of each supply chain;
a clearer articulation of the standards which Aurizon Network must comply with in conducting its maintenance activities, including express requirements to minimise the disruption of maintenance work on train services;
greater transparency over decisions made by Aurizon Network in relation to planning and scheduling maintenance by introducing additional supply chain performance reporting requirements;
additional avenues for independent review of Aurizon Network’s compliance with its maintenance and supply chain coordination obligations, including broad audit rights and certification obligations; and
changes to Aurizon Network’s revenue cap arrangements to preclude Aurizon Network’s ability to recover revenue in circumstances where it has intentionally performed a wrongful act or omission.
3 Outline of the QRC’s submission
The QRC’s part two submission is comprised of:
Overview of ongoing impacts of maintenance changes;
Transition from actual costs to efficient costs, while maintaining network service level standards - 'network performance incentive' (Item 1.3);
Transition from actual costs to efficient costs, while maintaining network service level standards - 'maintenance performance monitoring framework' (Item 1.4); and
Calculation of non-coal allocations towards network maintenance (Item 1.5);
Obligations to maintain the network and minimise disruptions to train services (Item 2.1);
Reporting requirements to assist access holders to identify reasons for disruption to train services (Item 2.2);
Aurizon Network's Board and maintenance matters (Item 2.3);
Supply chain co-ordination obligations with regard to the planning and scheduling of maintenance activities (Item 2.4); and
Adjustments to Aurizon Network's revenue-cap arrangements (Item 2.5);
Glossary; and
Attachment 1: partial mark up of UT5 against Aurizon Network’s 2017 Draft Access Undertaking and the QCA’s UT5 Draft Decision.
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4 Overview of ongoing impacts of maintenance changes
On 20 April 2018, the QRC provided its submission to the QCA on the ‘Capacity implications of Aurizon Network’s changed maintenance practices’.
The submission expressed, among other things, the QRC’s significant concerns about Aurizon Network’s misuse of its monopoly powers, including:
changing its maintenance practices for the purpose of hindering access (with a view to creating leverage for a commercial negotiation in relation to the QCA’s decision on the WACC);
failing to appropriately coordinate with other parts of the coal chain in relation to maintenance activities (both planned and unplanned); and
refusing to constructively engage with industry in a manner that would help customers to better understand the extent and nature of the changes and minimise their impacts.
In the time that has passed since the QRC lodged this submission with the QCA, there has been no abatement of Aurizon Network’s conduct. To the contrary, the impacts of Aurizon Network’s maintenance practices are being felt more broadly throughout each of the coal systems in the Central Queensland Coal Network (CQCN).
Further, correspondence received from Aurizon Network in the period post submission confirms the QRC’s prior concerns, with Michael Riches stating, among other things, that ‘[Aurizon Network] will also continue the practices we have advised previously that are focussed on giving priority to maintenance activities rather than train services’ (emphasis added).
5
In recent months, a number of customers have advised of the following continued impacts of Aurizon Network’s changed maintenance practices:
Misalignment of system closures and planned maintenance work: long term maintenance plans (including the most recent Critical Asset Alignment Calendars (CAACs)) have been unilaterally amended by Aurizon Network on short notice, such that system closures and other planned maintenance work is no longer aligned across each of the elements of the supply chain.
Impacts of maintenance work on train services in the day of operations: Aurizon Network has continued to implement changes to the way in which it undertakes maintenance work in the day of operations. For example, with respect to ballast and formation defect repairs, on Aurizon Network’s own advice, ‘wherever possible, Aurizon Network will now undertake permanent rectification works to ballast and formation defects and failures at the time the defect or failure is identified’ (emphasis added).
6 Previously, Aurizon Network
would use temporary rectification works until permanent rectification works could be undertaken and ‘planned for a time that minimises the impact on train services and optimises throughput’.
7 Aurizon Network’s revised approach
5 See letter from Aurizon Network to all customers, rail and port operators and CQCN supply chain stakeholders dated 21
May 2018.
6 See letter from Aurizon Network to all customers, rail and port operators and CQCN supply chain stakeholders dated 21
May 2018.
7 See letter from Aurizon Network to all customers, rail and port operators and CQCN supply chain stakeholders dated 21
May 2018.
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means that maintenance is undertaken regardless of the impact on scheduled train services.
Continued reduction in the number of available or useable train paths: there has been a consistent decline in the number of available or useable train paths, which has continued to impact a number of coal producers’ coal sales. For example, data obtained from a relevant customer reveals that in May and June 2018, it has continued to be unable to rail the volume of coal necessary to meet its contractual entitlements (despite having more than sufficient tonnes at the relevant mine). This has also resulted in considerable stockpiling at both mines and ports across the CQCN.
Lack of reliable operational information: there continues to be a lack of transparency and significant information asymmetry in relation to Aurizon Network’s changes in maintenance and operational practices. This is preventing customers and rail operators from being able to provide reliable forecasting in relation to future production capabilities.
The impacts of Aurizon Network’s behaviour are not sustainable and require robust changes to the drafting of UT5 to discourage such damaging conduct from being repeated in the future.
5 Item 1.3: Network performance incentive
The QCA have sought stakeholder feedback on the development of an incentive to encourage Aurizon Network and customers to work together to realise inefficiencies and cost savings.
QRC’s views 5.1
Generally speaking incentive mechanisms are difficult to make work. They can be manipulated, sometimes reward under-performance, often do not achieve their purpose, and can result in inappropriate focus on a measured parameter at the expense of other important considerations. For example:
an incentive based on reducing speed restrictions may result in excessive maintenance outages and premature asset replacement); and
an incentive rewarding performance in excess of contracted capacity could result in a reluctance to contract the full capacity of the system.
An incentive mechanism in relation to maintenance may be especially difficult because of the significant information asymmetry between customers and Aurizon Network. This asymmetry affects customers’ ability to help determine the performance level, as well as assess performance. These comments are of course made in the context of the current draft of the undertaking.
The QRC understand that the purpose of the performance incentive would be to encourage performance. In the context of the current issues where Aurizon Network are blatantly not complying with obligations, an incentive may be a matter to be considered in the future. Industry’s immediate concern is in ensuring that the undertaking is amended in a way that ensures that Aurizon Network can no longer undertake disruptive maintenance practices. In other words, in the QRC’s view, the amendments to the undertaking should be focussed on the scope of Aurizon Network’s obligations.
If a performance incentive were to be considered it should have the following features:
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(a) reward genuinely exceptional performance and not compliance with a required standard (and certainly not under-performance). Alternatively, if all variation from a base standard is to be rewarded, the mechanism should be reciprocal;
(b) it should be measurable;
(c) it should be transparent;
(d) it must address unintended consequences (see examples above); and
(e) it must be administered by an independent third party.
QRC has considered suggesting that Aurizon Network be required to submit proposed performance incentives as a ‘deferred process’ under UT5. However, this process was adopted for performance incentives under UT3, and for SUFA under UT3 and UT4, and failed in each case. Given the likelihood that UT5 will be approved well into its term, a deferred process is unlikely to be effective.
Therefore, we propose that the QCA should seek proposals on this matter during the term of UT5, conduct a consultation process, and release a discussion paper which sets out its preliminary thinking on incentive mechanisms. Aurizon Network could, if it chose to do so, take these suggestions into account when developing UT6.
6 Item 1.4: Maintenance performance monitoring framework
The QCA has asked whether it would be appropriate to implement a maintenance performance monitoring framework which provides transparency about trade-offs which Aurizon Network may make between maintenance and network and system availability.
QRC’s views 6.1
More information can only be a good thing. The more transparency the greater the likelihood that the network and system can be optimised for the benefit of all stakeholders, including Aurizon Network. The QRC have not proposed drafting for this provision.
7 Item 1.5: Calculation of non-coal allocations towards network maintenance
The QCA has asked for stakeholder comments on the calculation of non-coal allocations towards Aurizon Network’s maintenance costs.
QRC’s views 7.1
The QRC requests that the QCA perform a holistic assessment of how Aurizon Network’s Regulated Asset Base (RAB), operating costs and maintenance costs are calculated to fairly reflect the impact of non-coal services. The QRC’s position is as follows:
in relation to the RAB, the QRC considers that there should be an appropriate allocation of a portion of the RAB to non-coal services to reflect that portion of capacity in the network that is not available for use by coal services;
in relation to Aurizon Network’s operating costs, the QCA should consider how those costs have been calculated and allocate those costs including as between
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coal and non-coal services consistent with that method of calculation (and not that portion of capacity that has been reserved for non-coal services); and
in relation to Aurizon Network’s maintenance costs, the QCA should ensure that maintenance allowances reflected in reference tariffs over the long term relate to the traffic of coal services (and not that portion of maintenance costs which is caused by the operation of non-coal services).
8 Item 2.1: Obligations to maintain the network and minimise disruption to train services
The QCA has sought stakeholder comments on the scope of Aurizon Network’s obligations to maintain the network and minimise disruption to train services.
Why it is necessary to expand on the maintenance obligations in the 8.1undertaking
The access agreements and access undertaking contain a number of obligations which expressly or impliedly touch on Aurizon’s maintenance obligations.
It is important to note that the access agreements and access undertaking have developed slowly over time based on older generations of access agreements and access undertakings. As is to be expected, the documents are not as clear nor as modern as would be the case if the parties were starting from a blank page today.
It is also important to note that the access agreements and access undertaking are drafted on the basis that Aurizon Network will act in good faith and will seek to deliver Access. The access undertaking and access agreements do not contemplate a circumstance in which Aurizon Network would act in a way as to adversely affect the provision of Access or disrupt the provision of Access. Aurizon Network’s actions have fundamentally shifted the balance of what an appropriate access undertaking should look like. For example, Aurizon Network contracts capacity on the basis of capacity assessments which it undertakes in accordance with the terms of the relevant undertaking. Those capacity assessments must allow for ‘reasonable’ maintenance but do not contemplate Aurizon Network undertaking maintenance in a way that is intended to negatively impact on the provision of Access.
It is also important to recognise that there is a gross imbalance of information held by Aurizon Network and information held by access holders and customers. For example, where there is a change in scheduling or availability of a train path in most circumstances access holders, operators and customers will not have the underlying details which gave rise to the change. This information imbalance provides significant practical protection to Aurizon Network. The information imbalance creates a need to be more specific about Aurizon Network’s obligations.
Historically, matters relating to the provision of Access have largely been contained in access agreements. There is merit in addressing the maintenance obligations in the undertaking to a greater extent because:
(a) Aurizon Network are using maintenance as a weapon. This has elevated its importance.
(b) Including additional maintenance obligations in the undertaking will more easily enable customers to bring an action (where those customers do not hold an access agreement).
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(c) Improvements implemented via changes in the Standard Access Agreement will only take effect when new Access Agreements, including renewals, are entered into. This means that the improvements would take effect for different customers at different times, and would not be fully effective until the last of the existing agreements have expired.
The changes that ought to be made to the undertaking 8.2
The QRC have proposed a new clause 7A.7 in the undertaking. In that drafting the QRC have proposed a clearer statement of the standard of the maintenance obligation. That standard should reflect good industry practices.
The QRC also consider that the undertaking should expressly acknowledge that in undertaking maintenance work Aurizon Network should strive to reasonably minimise disruption to train services. That statement is necessary because it goes to the heart of Aurizon Network’s current improper practices.
In addition the undertaking should make it plain that to the extent that there is a contest between non-essential maintenance work and loss of train services Aurizon Network should seek to prioritise train services.
All relevant stakeholders should have the ability to commence a dispute under the dispute resolution provisions of the access undertaking where there is a concern that Aurizon Network has not complied with these new obligations.
9 Item 2.2: Reporting requirements to assist access holders to identify reasons for disruption to train services
The QCA has asked for stakeholder views on whether reporting obligations should be enhanced to provide increased transparency and accountability about the carrying out of maintenance works and the associated impacts on train services.
Why it is necessary to create additional reporting requirements on 9.1Aurizon Network under UT5
As it outlined in the QRC’s submission on Item 2.1 of the Consultation Paper, there is a significant asymmetry in the amount of essential operational information that is held by Aurizon Network and its Access Holders and Customers respectively. This asymmetry has been exacerbated by Aurizon Network’s maintenance changes, which have entailed further obfuscation about both the nature and impact of its operating practices. Further, this asymmetry is deliberate and consistent with Aurizon Network’s broader monopolistic strategy, with Michael Riches being quoted in the Australian Financial Review as follows:
We didn’t give detail to customers in significant advance of the decision we made, nor will we in relation to further changes that we have to make (emphasis added).
8
This behaviour is plainly improper and necessitates stronger accountability mechanisms in the access undertaking.
Customers have broadly expressed concerns in relation to a lack of transparency over the reasons (or lack thereof) provided in relation to:
8 See the Australian Financial Review article by Matthew Stevens dated 12 February 2018.
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where train services are cancelled, why those services were cancelled; (a)
where train services were not scheduled in accordance with Train Service (b)Entitlements (TSEs), why those services were not scheduled; and
importantly, whether Aurizon Network’s failure to do (a) and (b) was attributable (c)to its broader inability to adequately coordinate maintenance activities across the supply chain.
The current drafting of the undertaking places relatively generous obligations on Aurizon Network in terms of train scheduling (in accordance with the Network Management Principles) and performance reporting under Part 10. Most importantly, the access undertaking does not require Aurizon Network to disclose any of detailed underlying reasons for train services being cancelled or not scheduled. Without this information, it is difficult for customers to assess whether Aurizon Network is meeting, and is indeed capable of meeting, its contractual requirements.
While the System Rules go some way to providing additional detail about the procedures underlying train scheduling and planning, even these are limited. For example, in the ‘Cancellation Cause Identification’ process,
9 there is a high level classification of the
‘cancellation cause’ to one of a number of the elements of the supply chain such as ‘Port’, ‘Mine’, ‘Aurizon Network’ or ‘Other’. This analysis does not shed any light on the root causes for cancellation, nor how the interaction between the supply chain (and a misalignment of maintenance activities) may have led to the service being cancelled.
Importantly, the System Rules are also subject to constant review and amendment by Aurizon Network under clause 7A.2. This reinforces the need to introduce a more robust reporting mechanism into the substantive obligations of the access undertaking.
The changes that ought to be made to the undertaking 9.2
The QRC have proposed the insertion of a new clause 10.8 into the access undertaking which imposes an additional monthly reporting obligation. This obligation will require Aurizon Network to provide additional scheduling and supply chain performance information.
In that drafting, the QRC have included a number of detailed reporting obligations for Aurizon Network that will afford customers greater insight and transparency over:
the reasons why certain train services were cancelled or not scheduled; (a)
whether train paths considered to be ‘available’ by Aurizon Network were in fact (b)‘useable’ as system paths (taking into account the need to align to mainline paths, branch lines, dwells and port capacity to facilitate optimal supply chain performance); and
importantly, Aurizon Network’s efforts (or lack thereof) to perform its planning (c)and scheduling obligations in accordance with its broader obligations to coordinate across the supply chain, and act in line with industry best practice.
The QRC also consider that the undertaking should expressly require Aurizon Network to provide an unredacted copy of this report to the QCA so that it has greater regulatory oversight over Aurizon Network’s actions.
9 See section 5.2 of the System Rules.
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10 Item 2.3: Aurizon Network’s board and maintenance matters
The QCA has asked for views on the extent to which the undertaking provides an appropriate level of board involvement. In particular, the QCA has asked whether the Aurizon Network board should certify Aurizon Network’s maintenance obligations and related performance outcomes.
QRC’s views 10.1
The Aurizon Network board owe a duty to act in a way consistent with the best interests of the company. Presumably to some extent that includes ensuring that the company complies with its obligations. That duty has not to date tempered the actions of Aurizon Network. Accordingly, generally speaking, the QRC do not consider that the Aurizon Network board operate in a way as to encourage compliance.
The above said, the QRC see merit in the Aurizon Network board providing a certification for the purposes of the undertaking. For that certification to have any utility:
(a) The certification would need to be given in respect of relevant obligations. That is, the obligations would need to be meaningful and specific. In other words, the certification would only be of utility if the maintenance obligations in the undertaking were materially enhanced.
(b) The certification would need to be by the directors personally in their capacity as a director. If the certification were given by the company it would be of no value.
The QRC have drafted a proposed certification at clause 7A.7.4.
The QRC also considers there is merit in requiring the Aurizon Network board to provide a certification of each Capacity Assessment carried out under clause 7A.4 of UT5. Capacity Assessments include an assessment of the impact of maintenance on the capacity of the network and inform the basis on which Aurizon Network contracts capacity. The QRC have not proposed drafting for this provision, but the drafting would largely mirror that contained in the proposed clause 7A.7.4.
1.2 Broad audit rights
In addition to the board certification obligation, the QRC consider it appropriate that there be a compliance audit which confirms Aurizon Network’s compliance with its maintenance obligations. Such an audit is necessary because:
(a) of the information asymmetry; and
(b) Aurizon Network have displayed a willingness to breach its obligations in order to better its position.
A compliance audit serves to provide greater confidence that Aurizon Network will comply with its obligations. A compliance audit also serves to assist in remedying the information asymmetry.
The QRC’s proposed compliance audit drafting is contained at clause 7A.7.2 and 7A.7.3.
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11 Item 2.4: Supply chain coordination obligations with regard to planning and scheduling of maintenance activities
The QCA has sought stakeholder views regarding the appropriateness of Aurizon Network’s coal supply chain coordination obligations. Specifically, the QCA has requested further information on whether these obligations provide supply chain participants with sufficient information about Aurizon Network’s maintenance activities and enable it to coordinate maintenance with rail and port operators.
Why it is necessary to amend and expand on the supply chain 11.1coordination obligations in the undertaking
Prior to the announcement of its maintenance changes, Aurizon Network was consistent with its obligations more favourably disposed towards working flexibly with the supply chain when planning and scheduling its maintenance activities. On its own admission, Aurizon Network stated in its 12 February 2018 Australian Stock Exchange (ASX) announcement that:
Previously Aurizon Network accommodated varied work times and the scope of works to meet customers’ requirements, allowing trains to pass during the work schedule (emphasis added).
10
Aurizon expressly acknowledged that:
Flexibility maximises the throughput of coal services for customers.11
Aurizon Network has since repeatedly stated that, in response to the UT5 Draft Decision, it will ‘prioritise lowest-cost maintenance over flexibility’
12 to the detriment of supply chain
performance including throughput. Aurizon Network has expressly stated that it can implement this change in line with its contractual and regulatory obligations to current and prospective customers.
It is Aurizon Network’s view that working flexibly with the coal supply chain is a benefit it has provided to customers and not an obligation owed to customers. Aurizon Network views coordination as a benefit that it can unilaterally take away when supply chain coordination and flexibility no longer align with its commercial objectives.
Aurizon Network’s monopolistic attitude necessitates a clearer articulation of Aurizon Network’s obligations with respect to supply chain coordination in the access undertaking.
The current drafting of the access undertaking requires Aurizon Network to act ‘reasonably’ with respect to its efforts to coordinate maintenance activities across the supply chain, including in its engagement with Supply Chain Groups. Aurizon Network’s express refusal to cooperate with the supply chain with respect to planning maintenance is not reasonable. Aurizon Network’s decision to ignore requests from Supply Chain Groups, such as Gladstone Coal Exporters Executive (GCEE),
13 to minimise disruption to
train services is not reasonable.
Further, the access undertaking does not contemplate a scenario where Aurizon Network deliberately undermines opportunities for supply chain coordination as a form of commercial leverage. However, consistent with its threats, and as is outlined elsewhere
10
See Aurizon Holdings’ ASX announcement dated 12 February 2018.
11 See Aurizon Holdings’ ASX announcement dated 12 February 2018.
12 See Aurizon Holdings’ ASX announcement dated 12 February 2018.
13 See GCEE letter dated 8 March 2018
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in this submission, Aurizon Network continues to make a number of last minute changes to long term planned maintenance that deny opportunities for supply chain coordination.
Aurizon Network’s recent actions therefore require that Access Holders and Customers be afforded a greater degree of certainty with respect to the specific actions Aurizon Network must perform under the undertaking in order to comply with its supply chain coordination obligations.
The changes that ought to be made to the undertaking 11.2
The QRC has proposed a number of amendments to clause 7A.3 which more stringently define Aurizon Network’s obligations to ‘reasonably facilitate cooperation between all elements of the Supply Chain’ and ‘to seek to maximise the performance of those Supply Chains’.
In that drafting, the QRC has proposed a more expansive objective with respect to supply chain coordination. The QRC considers that Aurizon Network should be required to perform its obligations under the access undertaking with a view to maximising the scheduling of trains and throughput of the relevant coal systems. Aurizon Network should also be required to act in the best interests of the supply chain (including all participants from mine, to rail, to port). This statement is important as Aurizon Network has previously relied on the lack of any requirement to do so in justifying its improper practices.
14
The QRC has also proposed more comprehensive obligations that Aurizon Network must comply with when scheduling and planning maintenance activities, which include:
(a) maximising the alignment of possessions and other maintenance work, such that closures are aligned, as far as possible, between each of the elements of the supply chain; and
(b) minimising the disruption caused by possessions and maintenance work on the performance of the supply chain.
Creating more robust coordination obligations on Aurizon Network will assist in remedying the current power imbalance between Aurizon Network and industry.
12 Item 2.5: Adjustments to Aurizon Network’s revenue-cap arrangements
The QCA is seeking stakeholder comments about whether amendments are required to the materiality threshold in relation to Aurizon Network’s revenue-cap arrangements.
QRC’s views 12.1
The revenue cap arrangements are drafted on the assumption that Aurizon Network will operate in a way which is intended to deliver contracted capacity entitlements. The revenue cap adjustment allows Aurizon Network to recover a shortfall in revenue where it has failed to recover the Allowable Revenue. This mechanism was developed on an assumption that no longer stands.
14
See QE letter to HSF dated 23 April 2018: AN’s position remains, as detailed in its response to the Draft Decision, that the maintenance allowance proposed is based on some errors in calculation and on the adoption of practices that are not in its view in the best interests of the supply chain, albeit that they are maintenance practices that can be adopted while without offending against AN's obligations in access undertaking or any access agreements.
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Aurizon Network’s recent actions demonstrate a clear intention to change operating and maintenance practices so as to adversely impact the capacity of the network. Aurizon Network’s actions are deliberate and wrongful. It cannot be the case that Aurizon Network is able to recover revenue which it has otherwise lost because of a decision to knowingly adversely affect the capacity of the network. The maximum allowable revenue cannot be a guarantee of the revenue which Aurizon Network can earn in these circumstances.
Given the above, the revenue cap arrangements under UT5 should be amended to prevent such a perverse outcome from occurring. More specifically, the total actual revenue that Aurizon Network can recover should exclude any revenue reasonably attributable to any wrongful act or omission of Aurizon Network which act or omission was intentional and deliberate. This should be the case whether or not Aurizon Network was aware that the act or omission was wrongful at the time the act or omission was undertaken. There should be no materiality threshold that applies in these circumstances. This proposal has been made as it adds no risk to Aurizon Network. Including a test which depends on an intentional and deliberate act of Aurizon Network means the circumstances in which Aurizon Network will be prevented from recovering lost revenue are entirely within Aurizon Network’s control.
In deciding whether to approve any revenue adjustment amounts, the QCA should also have the power to undertake a reasonable estimate of the revenue attributable to an intentional and deliberate wrongful act or omission of Aurizon Network and include that estimate in the calculation of total actual revenue. Allowing the QCA greater powers in this respect will ensure Aurizon Network is not able to evade the intended disciplinary effect of this adjustment.
In addition to the improvements described above, the QCA should also consider the sterilisation of capacity that has already occurred during the term of UT5 but prior to the approval of UT5 in setting the revenue allowance for UT5. The QRC considers Aurizon Network should not receive revenue relating to the capital costs (return on capital or depreciation) of the capacity which has been (and continues to be) withheld from productive use by Aurizon Network in implementing its changed operating and maintenance practices since February 2018. Given any improvements to the drafting of UT5 are unlikely to achieve this outcome in respect of the period of time which has already elapsed prior to approval of UT5, the QRC recommends the QCA takes these effects into consideration when approving the revenue allowances for the term of UT5.
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Glossary of terms
Any capitalised term used in this submission not defined in the table below, has the meaning given to it in UT4 or UT5 (as relevant).
Term Meaning
ASX Australian Stock Exchange
Aurizon Network Aurizon Network Pty Ltd
CAAC Critical Asset Alignment Calendar
Consultation Paper The consultation paper released by the QCA on 29 May 2018.
CQCN Central Queensland Coal Network
GCEE Gladstone Coal Exporters Executive
HSF Herbert Smith Freehills
QCA Queensland Competition Authority
QRC Queensland Resources Council
RAB Regulated Asset Base
SUFA Standard User Funding Agreement
UT4 Aurizon Network’s 2016 access undertaking approved by the QCA on 11 October 2016
UT5 Aurizon Network’s 2017 draft access undertaking
WACC Weighted Average Cost of Capital
QRC partial mark-up of UT5 in response to QCA Consultation Paper – 20.06.18
[Note: This drafting is focused on specific sections and does not seek to update all
clause references (and other consequential amendments) throughout the Undertaking
beyond those sections. Specifically, this drafting addresses:
Obligations to maintain the network and minimise disruption to train services
[see new clause 7A.7 and new definition of ‘Best Operating Practice’];
Reporting requirements to assist access holders to identify reasons for
disruption to train services [see new clause 10.8];
Aurizon Network’s Board and maintenance matters [see clause 7A.7.2 and
clause 7A.7.3 regarding ‘Independent compliance audit’ and clause 7A.7.4
regarding ‘Certification by Aurizon Network’s board of directors’];
Supply chain co-ordination obligations with regard to the planning and
scheduling of maintenance activities [see amendments to clause 7A.3]; and
Adjustments to Aurizon Network’s revenue cap arrangements [see amendments
to Schedule F].
[This section is marked up against Aurizon Network’s 2017 Draft Access
Undertaking.]
7A.3 Supply Chain coordination
(a) Aurizon Network must (to the extent it is reasonable to do so)
participate in:
(i) each Supply Chain Group in relation to:
(A) the coordination and effective performance of a
relevant Supply Chain; and
(B) if applicable, the development of a Supply Chain
Master Plan; and
(ii) discussions with other service providers and participants in
the Supply Chain with a view to to ensure the coordination of
maintenance activities in the relevant Supply Chain; and
(ii)(iii) . the development and implementation of productivity
improvement initiatives (including the use of any Trains that
vary from the characteristics required by the Reference Train
Service) with other service providers and participants in the
Supply Chain to improve the efficiency and performance of
the relevant Supply Chain.
(b) Without limiting the nature of Aurizon Network’s participation, if
requested by a Supply Chain Group (acting reasonably), Aurizon
Network must if it has capacity to do so and believes the request is
reasonable:
(i) participate in the development of and undertake regular
reviews of that Supply Chain Group’s master plan;
(ii) review options for the development of Capacity being
investigated by the Supply Chain Group and advise if and
how any option is likely to impact on the Network
Management Principles, System Operating Parameters or
System Rules for the relevant Coal System; and.
(iii) if requested by the Supply Chain Group, investigate
operational changes that could increase Capacity in the
relevant Coal System, including by conducting a review of
the relevant System Operating Parameters under
clause 7A.5.
(c) Subject to the terms of this Undertaking, Aurizon Network must, in
respect of each Supply Chain,:
(i) reasonably facilitate an appropriate balance between
cooperation between all elements of Supply Chains (in
respect of which Access forms a part) to seek to maximise
the performance of those Supply Chains and the other
matters set out in clause 2.2 of this Undertaking; and
(ii) act in a way that is not inconsistent with Part 2.
(d) Aurizon Network must, in performing its obligations under this
Undertaking:
(i) use its best endeavours to maximise the scheduling and
throughput of Trains on the Rail Infrastructure by:
(A) coordinating across all elements of the relevant
Supply Chain and with each other service provider
and participant in the Supply Chain;
(B) maximising the number of Train Paths that are
useable as System Paths; and
(C) maximising (to the extent relevant to the Rail
Infrastructure) performance (including throughput)
of the Supply Chain; and
(ii) act in the best interests of the Supply Chain,
including but not limited to:
(i) coordinating to the extent possible the activities comprising
Maintenance Work across all elements of the relevant
Supply Chain to maximise the alignment of Possessions and
Maintenance Work with the closure or maintenance of, or
any other outages or unavailability of, other elements of the
Supply Chain;
(ii) minimising changes to the timing of planned system closures
to allow for effective planning by other service providers and
participants in the relevant Supply Chain; and
(ii)(iii) minimising the disruptive impact of Possessions and
Maintenance Work on the performance (including
throughput) of the Supply Chain.
(d)(e) If:
(i) a Supply Chain Group identifies an operational change to its
Coal System which change may improve Capacity in the
relevant Coal System; and
(ii) Aurizon Network decides not to implement the change,
Aurizon Network will provide the Supply Chain Group with its reasons
for not implementing the change.
(e)(f) Aurizon Network will not be obliged to:
(i) undertake any activity referred to in clause 7A.3(a) or
clause 7A.3(b) unless the reasonable cost of undertaking
that activity is recoverable by Aurizon Network on the terms
of this Undertaking; and
(ii) make any binding commitment or to take any action as a
result of its participation and discussions referred to in
clause 7A.3(a).
Part 12 Definitions and Interpretation:
Best Operating Practice the meaning given to that term in clause
7A.7.1(b).
7A.7 Maintenance Work principles
7A.7.1 Compliance with Best Operating Practice
Aurizon Network must: (a)
(i) provide or procure Maintenance Work;
(ii) schedule and plan Maintenance Work and Possessions; and
(iii) undertake Maintenance Work, whether planned or
unplanned,
in accordance with Best Operating Practice.
For the purpose of clause 7A.7.1(a), Best Operating Practice means (b)
carrying out any undertaking in a manner which:
(i) is consistent with Good Engineering Practices;
(ii) is consistent with clause 7A.3;
(iii) maximises the availability of Train Paths that are useable as
System Paths (including in respect of return journeys) in
accordance with clause 7A.7.1(c); and
(iv) minimises to the extent reasonable the disruption and delay
caused by Maintenance Work and Possessions on Aurizon
Network’s ability to make Rail Infrastructure available for the
efficient operation of Train Services in accordance with any
Access Holder’s Train Service Entitlements.
In the event of a conflict regarding the availability of a System Path (c)
between Maintenance Work (whether as part of a Possession or
otherwise) and Train Services, Aurizon Network must give priority to
Train Services, except to the extent that prioritising Train Services
would:
(i) cause risk or unreasonable cost to Aurizon Network; or
(ii) otherwise not comply with applicable Safeworking
Procedures and Safety Standards.
For the avoidance of doubt, any change to the operating and (d)
maintenance costs allowance approved by the QCA does not in any
way alter Aurizon Network’s obligations under this clause 7A.7.1.
7A.7.2 Independent compliance audit
Despite any other provisions of this Undertaking that require the (a)
conduct of an audit, at any time the QCA, an Access Holder, Access
Seeker, Customer or Train Operator may request Aurizon Network in
writing to, and on receipt of that request Aurizon Network must,
engage an Auditor to undertake an audit, in accordance with clause
7A.7.3, in relation to whether Aurizon Network has complied with its
obligations under clause 7A.7.1.
The audit will be conducted in accordance with this clause 7A.7.3. (b)
The Auditor will compile an audit report identifying: (c)
(i) whether Aurizon Network has complied in all material
respects with its obligations which were the subject of the
requested audit and if not, details as to the relevant non-
compliance; and
(ii) the process adopted for the conduct of the audit.
To the extent approved by the QCA, costs incurred by the Auditor (or (d)
Auditors) in conducting an audit under this clause 7A.7.2 will be
borne by the QCA, subject to clause 7A.7.2(e).
To the extent that any costs incurred by the Auditor are the direct (e)
result of any abnormality caused by Aurizon Network, Aurizon
Network will be responsible for paying that portion of the Auditor’s
costs.
7A.7.3 Audit process
An audit process under clause 7A.7.2 must be conducted in accordance
with the following process:
Aurizon Network will appoint an Auditor (or Auditors) who will be (a)
available to conduct audits required in accordance with clause
7A.7.3;
the Auditor must: (b)
(i) be independent of Aurizon Network and all other Aurizon
Parties;
(ii) be appropriately qualified and experienced;
(iii) be subject to professional standards of ethics and
independence; and
(iv) be approved by the QCA. Once approved, the approval will
be effective for the Term, subject to the QCA having a right
to require the appointment of a replacement Auditor;
the Auditor will have a duty of care to the QCA, Access Holder, (c)
Access Seeker, Customer or Train Operator in the provision of the
audit and, in the event of a conflict between the Auditor’s obligations
to Aurizon Network and its duty of care to the QCA, Access Holder,
Access Seeker, Customer or Train Operator, the Auditor’s duty of
care to the QCA, Access Holder, Access Seeker, Customer or Train
Operator will take precedence;
prior to commencing an audit, the Auditor must agree on an audit plan (d)
with Aurizon Network, document that audit plan, and obtain the QCA’s
approval of the audit plan;
the audit plan will: (e)
(i) consist of a proposed work program for the execution of and
scope of the audit, including audit costs (which are payable
by Aurizon Network);
(ii) where necessary, contain any procedural controls necessary
to ensure the independence of the Auditor;
(iii) provide for the establishment of an audit liaison group,
comprising the Auditor, Aurizon Network, and the QCA,
Access Holder, Access Seeker, Customer or Train Operator,
during the course of the audit, to provide a forum for the
resolution of any audit issues that arise; and
(iv) include a process for consultation with the QCA during the
audit to ensure that the audit addresses the matters and
standards required by the QCA for the particular audit being
conducted. The QCA may consult with Access Holders,
Access Seekers, Customers and Train Operators over the
matters and standards to be addressed in, and required of,
the audit;
Aurizon Network must provide any relevant information the Auditor (f)
reasonably requires for the purpose of conducting the audit, within a
nominated timeframe that is determined by the Auditor to be
reasonable after consultation with Aurizon Network;
the Auditor may be required to enter into a confidentiality deed with (g)
Aurizon Network in relation to any information provided by Aurizon
Network, to the effect that it must keep the information confidential
and only use that information for the purpose of conducting the audit
and completing the audit report, provided however that the Auditor will
be entitled to provide all information obtained as a result of the audit
to the QCA, Access Holder, Access Seeker, Customer or Train
Operator;
any drafts of an audit report that are provided to Aurizon Network by (h)
the Auditor must, at the same time, be provided to the QCA, Access
Holder, Access Seeker, Customer or Train Operator;
the Auditor will provide Aurizon Network, the relevant Access Holder, (i)
Access Seeker, Customer or Train Operator and the QCA a copy of:
(i) the audit report; and
(ii) any letter or report from the Auditor accompanying the audit
report which explains the audit findings in greater detail,
(iii) both of which the QCA may, if it considers it appropriate to
do so, publish to parties thought appropriate by the QCA
having regard to the scope of the audit and its findings;
Aurizon Network must: (j)
(i) prepare and provide to the QCA, Access Holder, Access
Seeker, Customer or Train Operator an implementation plan;
and
(ii) use reasonable endeavours,
to implement the Auditor’s recommendations in the audit report or
any other letters or reports provided under clause 7A.7.3(i), including
recommendations in relation to implementing new policies, practices
or procedures directed to ensuring Aurizon Network satisfies the
obligations set out in this Undertaking, as soon as reasonably
practicable after receiving the Auditor’s recommendations, except to
the extent the non-implementation is approved by the QCA;
following the provision of an audit report under clause 7A.7.3(i) and (k)
receipt of Aurizon Network’s implementation plan under clause
7A.7.3(j):
(i) the QCA may, at its discretion, request that Aurizon Network
provide evidence that it has used reasonable endeavours to
implement any or all of the recommendations made by the
Auditor in the relevant audit report in accordance with the
implementation plan prepared under clause 7A.7.3(j); and
(ii) if Aurizon Network cannot provide such evidence to the
satisfaction of the QCA (in its discretion), the QCA may
direct Aurizon Network use reasonable endeavours to take
the necessary actions required to implement the relevant
recommendations within a specified timeframe; and
if Aurizon Network fails to comply with a direction issued by the QCA (l)
under clause 7A.7.3(k), on request from the QCA, Aurizon Network
must provide all the documents and information in its possession that
relate to its failure to comply with the direction given under clause
7A.7.3(k) to the QCA.
7A.7.4 Certification by Aurizon Network’s board of directors
Despite any other provisions of this Undertaking, an Access Holder (a)
may at any time request that Aurizon Network’s board of directors
certify that Aurizon Network has complied with its obligations under
clause 7A.3 and clause 7A.7.1 by certifying as accurate any of the
performance or cost reports provided under Part 10 of this
Undertaking, including the Monthly report provided under clause
10.8;
If in providing a certification required by this Undertaking Aurizon (b)
Network’s board of directors relies on information or professional or
expert advice, given or prepared by:
(i) Aurizon Network Personnel whom Aurizon Network’s board
of directors believes on reasonable grounds to be reliable
and competent in relation to the matters concerned;
(ii) a professional adviser or expert in relation to matters that
Aurizon Network’s board of directors believes on reasonable
grounds to be within the person’s professional or expert
competence; and
(iii) the reliance was made:
(A) in good faith; and
(B) after making an independent assessment of the
information or advice, having regard to Aurizon
Network’s board of directors’ knowledge of Aurizon
Network and the complexity of the structure and
operations of Aurizon Network; and
(iv) the reasonableness of Aurizon Network’s board of directors’
reliance on the information or advice arises in legal
proceedings or an arbitration to determine whether Aurizon
Network’s board of directors has performed with due care
and diligence in providing the certification,
Aurizon Network’s board of directors’ reliance on the information or
advice is deemed to be reasonable unless the contrary is proved.
10.8 Provision of additional scheduling and Supply Chain performance
information
Without limiting any other reporting obligations on Aurizon Network (a)
under this Undertaking, Aurizon Network must provide Access
Holders, their Customers (if applicable) and Train Operators with a
Monthly report containing the additional scheduling and Supply Chain
performance information detailed in clause 10.8(c):
(i) as soon as reasonably practicable, and by no later than 10
Business Days after the end of the relevant Month; and
(ii) subject to clause 10.8(b), in a form that does not:
(A) reveal the identity of any individual Access Holder,
Customer or Train Operator; and
(B) disclose any information that is commercially
sensitive to an Access Holder, Customer or Train
Operator.
For the purpose of clause 10.8(a)(ii), any Access Holder, Customer (b)
or Train Operator may provide its prior written consent to Aurizon
Network for its identity and commercially sensitive information to be
disclosed in the Monthly report.
The Monthly report required by clause 10.8(a) must include the (c)
following information:
(i) for any Train Service that was cancelled, the underlying
reasons for that Train Service being cancelled, including:
(A) whether the Train Service was cancelled due to:
(1) Maintenance Work or Possession(s) on
the relevant Train Path(s); or
(2) a failure to sufficiently align Mainline
Paths, Dwell, branch lines and port
unloading facilities to create Train Path
that was useable as a System Path
(including in respect of a return journey);
(B) if the Train Service was cancelled due to
Possession(s):
(1) the type of Possession (whether a
Planned Possession, Urgent Possession
or Emergency Possession) and the
reasons for classifying the Possession as
that type of Possession; and
(2) the circumstances giving rise to the need
for that Possession, including detailed
underlying reasons for the Possession;
(C) if the Train Service was cancelled due to
Maintenance Work (that falls outside of a
Possession), a detailed outline of the
circumstances giving rise to the need for that
Maintenance Work;
(D) detailed information evidencing Aurizon Network’s
compliance with its obligations under clause 7A.3
and clause 7A.7.1; and
(E) to the extent possible, the steps that Aurizon
Network proposes to implement, or has
implemented, to re-schedule the Train Service;
(ii) for any Train Service that was not scheduled in accordance
with the relevant Access Holders’ Train Service Entitlements,
the underlying reasons for that Train Service not being
scheduled, including:
(A) whether the Train Service was not scheduled due
to:
(1) Maintenance Work or Possession(s) on
the relevant Train Path(s); or
(2) a failure to sufficiently align Mainline
Paths, Dwell, branch lines and port
unloading facilities to create a Train Path
that is useable as a System Path
(including in respect of a return journey);
(B) if the Train Service was not scheduled due to
Possession(s):
(1) the type of Possession (whether a
Planned Possession, Urgent Possession
or Emergency Possession) and the
reasons for classifying the Possession as
that type of Possession; and
(2) the circumstances giving rise to the need
for that Possession, including detailed
underlying reasons for the Possession;
(C) if the Train Service was not scheduled due to
Maintenance Work (that falls outside of a
Possession), the circumstances giving rise to the
need for that Maintenance Work; and
(D) detailed information evidencing Aurizon Network’s
compliance with its obligations under clause 7A.3
and clause 7A.7.1;
(iii) for any Maintenance Work and Possession(s):
(A) the hours scheduled for that Maintenance Work or
Possession(s) (if applicable);
(B) the actual hours spent carrying out that
Maintenance Work or Possession(s) (including any
hours additional to those that were scheduled); and
(C) when (days and times) that Maintenance Work or
Possession(s) was performed.
Aurizon Network must promptly provide the Monthly report required (d)
under clause 10.8(a) to the QCA on an unredacted basis, and by no
later than the timeframe provided under clause 10.8(a)(i).
[This section is marked up against the QCA Draft Decision drafting of Schedule F.]
Schedule F
Reference Tariff
1 General provisions
1.1 Purpose
This Schedule F will be used for the following purposes:
(a) Aurizon Network’s formulation of Access Charges for a Train Service
to which a Reference Tariff applies; and
(b) where Access Charges, and related provisions, in an Access
Agreement that were originally determined based on this Schedule F
or Schedule F of an Applicable Undertaking, to allow for the
adjustment of those Access Charges, and related provisions, in
accordance with that Access Agreement for consistency with this
Schedule F (as amended or replaced from time to time).
1.2 Application of Reference Tariffs
The Reference Tariffs in this Schedule F:
(a) apply to coal carrying Train Services from the Commencing Date to
the Terminating Date; and
(b) are based on a Reference Train Service.
1.3 General characteristics of Reference Train Services
The Reference Train Service in respect of the Reference Tariffs:
(a) (Commodity) carries only bulk coal;1
(b) (Operational characteristics) meets the following criteria:
(i) the additional Reference Train Service criteria listed in
relation to the applicable Reference Tariff (for example, in
clauses 7.1, 8.1, 9.1, 10.1, and 11.1);
(ii) complies with the maximum speeds permitted on the
Nominated Infrastructure as specified in the relevant
Preliminary Information;
(iii) complies with Aurizon Network’s Rollingstock Interface
Standards applicable to the Nominated Infrastructure;
(iv) is otherwise compatible with the Nominated Infrastructure
described in the relevant Preliminary Information and
1 In defining bulk coal, no differentiation is to be made between coal qualities or types, or between the end use
markets of the coal.
requires no additional expenditure by Aurizon Network to
implement varied Below Rail controls identified in the IRMP;
(v) operates in accordance with nominated sectional running
times specified in the relevant Preliminary Information;
(vi) uses bottom dump wagons with the “KWIK DROP” door
operating mechanism; and
(vii) uses measures to minimise coal spillage and leakage and
coal dust emissions en route that are consistent with the
Coal Loss Mitigation Provisions in Schedule J;
(c) (Below Rail Services) only requires services from Aurizon Network
that are Below Rail Services and that Below Rail Services comprised
in Access are provided in accordance with this Undertaking;
(d) (Conditions of Access) operates in accordance with an Access
Agreement on substantially the same terms as a Standard Access
Agreement applicable to coal carrying Train Services, where the
differences from the Standard Access Agreement do not give rise to a
material increase in cost or risk; and
(e) (Train Service Entitlement) has a Train Service Entitlement:
(i) based on Trains being available for operation 24 hours per
day and 360 days per year; and
(ii) specified in terms of Cyclic Traffic which will:
(A) operate in accordance with the distribution set out
in the MTP;
(B) have regard to Planned Possessions and any other
matters agreed between Aurizon Network and other
service providers in the relevant Supply Chain; and
(C) comply with the applicable scheduling procedures
as set out in the Network Management Principles.
2 Reference Tariff
2.1 Composition of Reference Tariff
The Reference Tariff is a charge in relation to Train Services that have
operated, calculated in accordance with clause 2.2 and, if applicable,
clause 2.3 (including Adjustment Charges) with specified Reference Tariff
inputs and, if applicable, any System Premiums or System Discounts.
2.2 Calculations for Reference Train Services
(a) Subject to clause 2.3, a charge for Reference Train Services is
calculated as:
where:
AT1 is the incremental maintenance tariff specified as the AT1 input
for the nominated Reference Train Service as specified for the
relevant Reference Tariff (for example, as specified in clauses
7.2, 8.2, 9.2, 10.2 and 11.2, as applicable);
AT2 is the incremental capacity tariff specified as the AT2 input for the
nominated Reference Train Service as specified for the relevant
Reference Tariff (for example, as specified in clauses 7.2, 8.2,
9.2, 10.2 and 11.2, as applicable);
AT3 is an allocative tariff specified as the AT3 input for the nominated
Reference Train Service as specified for the relevant Reference
Tariff (for example, as specified in clauses 7.2, 8.2, 9.2, 10.2 and
11.2, as applicable);
AT4 is an allocative tariff specified as the AT4 input for the nominated
Reference Train Service as specified for the relevant Reference
Tariff (for example, as specified in clauses 7.2, 8.2, 9.2, 10.2 and
11.2, as applicable);
AT5 is the electric access tariff specified as the AT5 input for the
nominated Reference Train Service as specified for the relevant
Reference Tariff (for example, as specified in clauses 7.2 and
8.2, as applicable); and
EC is the electric energy charge which is initially (from the
Commencing Date) as specified as the EC input for the
nominated Reference Train Service as specified for the relevant
Reference Tariff (for example, as specified in clauses 7.2 and
8.2, as applicable), and after the Approval Date as otherwise
published by Aurizon Network on the Website on or about each
31 May during the Term after Aurizon Network seeks and obtains
the QCA’s approval (in accordance with clause 2.2(f)) for a new
electric energy charge (taking into account any over or under
recovery in the previous Year),
provided that the above calculation is subject to the addition of any
applicable Adjustment Charge from time to time (including, if
necessary, on a pro rata basis with other Train Services that have the
same origin and destination and Access Holder and are run during
same Billing Period, as the nominated Reference Train Service).
For clarity, the rtp for a Reference Train Service equals one.
(b) The amounts of the AT1, AT2, AT3, AT4, AT5, EC and the QCA Levy
inputs (including the System Discounts and System Premiums, if
ntLev yQCA 1000
egtkEC
1000
egtkATntAT
1000
ntkATrtpAT
1000
gtkAT 54321
applicable) specified for the relevant Reference Tariff and any
Adjustment Charge are GST exclusive.2
(c) For the purposes of this Schedule F, a Train Service is a one way
Train Service, that is, the journey from the Nominated Loading Facility
to the Nominated Unloading Facility is one Train Service, and the
return journey from the Nominated Unloading Facility to the
Nominated Loading Facility is a second Train Service.
(d) To the extent that the calculation of gtk and nt for a Train Service
require a weight for the relevant Train or any Rollingstock comprised
in that Train, weights may be nominal or actual weights, or a
combination of nominal and actual weights provided that, unless
otherwise agreed by Aurizon Network:
(i) any nominal weights will be as set out or calculated in the
relevant Access Agreement or, otherwise, as agreed or
approved by Aurizon Network, in relation to the calculation of
gtk or nt, as applicable; and
(ii) actual weight will only be used where:
(A) the gross weight (in tonnes) of loaded or partly
loaded wagons needs to be determined;
(B) there is a functioning weighbridge or weightometer
(verified under the National Measurement Act 1960
(Cth)) located en route between the origin and
destination for the Train Service;
(C) Aurizon Network has agreed that the weighbridge
or weightometer can be used to weigh wagons for
the purpose of calculating Access Charges; and
(D) the relevant wagons can actually be weighed by
that weighbridge or weightometer.
(e) When Aurizon Network publishes the EC, it must separately identify
the level of the Environment Compliance Charge within the EC.
(f) The QCA may approve an EX for the purposes of clause 2.2(a) if it
considers that the EC is reasonable and the consequential
adjustments to [Allowable Revenues] [and Reference Tariffs] (if any)
are calculated properly.
2.3 Calculations for a Cross System Train Service
(a) For a Cross System Train Service, the Reference Train Service
description for each applicable Reference Tariff for each relevant Coal
System will be applied to the extent that the Train Service is using
2 An amount for GST will be added to the total calculated Access Charge, in accordance with the provisions of the
applicable Access Agreement, at invoicing.
that Coal System and the calculation under clause 2.2 will be
adjusted by applying the following:
(i) AT1 will be the AT1 component of the Reference Tariff for:
(A) the Origin Tariff, for the gtk attributable to the Origin
System; and
(B) the Destination Tariff, for the gtk attributable to the
Destination System;
(ii) AT2 will be determined as follows:
(A) the AT2 component of the Reference Tariff in the
Origin System will be applicable to the Train Paths
used in the Origin System, but only if the Train
Service operates on capacity constrained corridors
of the Origin System as identified in clause 2.3(b);
and
(B) the AT2 component of the Reference Tariff in the
Destination System will be applicable in
accordance with clause 2.2;
(iii) AT3 will be the AT3 input for the relevant Reference Tariffs
for:
(A) the Origin Tariff, for the ntk attributable to the Origin
System; and
(B) the Destination Tariff, for the ntk attributable to the
Destination System; and
(iv) AT4 will be the AT4 input for the Origin Tariff;
(v) AT5 and EC will be determined as the AT5 and EC
components of the Reference Tariff for:
(A) the Origin System, for the egtk attributable to the
Origin System; and
(B) the Destination System, for the egtk attributable to
the Destination System; and
(vi) the QCA Levy component of the Reference Tariff in the
Destination System will be applicable in accordance with
clause 2.2, applied to the nt for the Train Service.
(b) For the purposes of clause 2.3(a)(ii), unless otherwise approved by
the QCA, the Rail Infrastructure comprising railways between:
(i) Coppabella and the Hay Point Junction;
(ii) Newlands and Abbot Point; and
(iii) Burngrove and the port of Gladstone (including domestic
coal terminals in the vicinity of Gladstone),
is regarded as capacity constrained Rail Infrastructure.
(c) For the purpose of clause 2.3(a), if a Cross System Train Service
loads in the Blackwater System and unloads in the Newlands System,
then the Goonyella to Abbot Point System is deemed to be the
Destination System for that Cross System Train Service.
3 Calculations for Take or Pay
3.1 Overview
(a) The Take or Pay payable to Aurizon Network will be calculated in a
manner consistent with this clause 3.
3.2 Application of historical Take or Pay arrangements
(a) A different manner of calculation may apply to a Take or Pay
depending on the Applicable Undertaking in force at the time that the
relevant Access Agreement was entered into.
(b) This clause 3.2 describes the application of the Take or Pay
obligations contained in Access Agreements that were originally
entered into in accordance with the 2001 Undertaking, 2005
Undertaking and/or 2008 Undertaking, given that the Take or Pay
obligations reference the undertaking in force at the time of their
application.
(c) Where the Access Holder has a Take or Pay with Aurizon Network
under an Access Agreement named in Column 1 (2001/05/08 Access
Agreement), the Take or Pay will be calculated in accordance with
Column 2, subject to the adjustments made in Column 3 of the
corresponding row in the following table:
Column 1 Column 2 Column 3
An Access Agreement that was executed or renewed on or after 20 December 2001 but prior to 30 June 2006.
A New Access Agreement where the relevant Old Access Agreement was executed or renewed
Clause 3.2, Part A, Schedule F of the 2001 Undertaking
Where the calculation refers to:
(a) the System Gtk; or
(b) gtk in circumstances where that gtk relates to Train Services other than solely those under the relevant Access Agreement,
then exclude any gtk attributable to any Train Services where the Access Charges for those Train Services are set based on an Expansion Tariff.
3
3 Access Agreements for coal carrying Train Services executed or renewed on or after 20 December 2001 but
prior to 30 June 2006 (UT1 Access Agreements) will have Access Charges for Train Services in a Coal System set based on the relevant System Reference Tariff for that Coal System. Train Services under a UT1 Access Agreements will not have Access Charges set based on any Expansion Tariff for that Coal System. The relevant System Gtk or gtk should be limited to those Train Services whose Access Charges are set based on the same System Reference Tariff as the relevant Train Services for which a Take or Pay is being calculated. In the same way, the Monthly System Forecasts for each Coal System only relate to Train Services whose Access Charges are set by based on the relevant System Reference Tariff.
Column 1 Column 2 Column 3
on or after 20 December 2001 but prior to 30 June 2006.
The references to System Gtk, System Forecast, and gtk in this row have the meanings given to those terms under the 2001 Undertaking.
Where the calculation refers to the System Forecast, then that System Forecast is a reference to the Monthly System Forecast for the relevant Coal System set out in clause 12 of
Schedule F.
An Access Agreement that was executed or renewed on or after 30 June 2006 but prior to 23 October 2008.
A New Access Agreement where the relevant Old Access Agreement was executed on or after 30 June 2006 but prior to 23 October 2008.
Clause 2.2, Part B, Schedule F of the 2005 Undertaking
1. A reference in that calculation to the “System Gtk”, or to gtk in circumstances where that gtk relates to Train Services other than solely those under the relevant Access Agreement, excludes any gtk attributable to any Train Services where the Access Charges for those Train Services are set based on an Expansion Tariff
4.
2. A reference in that calculation to the “System Forecast” is a reference to the Gtk Forecast for the relevant System Reference Tariff.
3. A reference to “Paragraph 7.4.4(f) of the Undertaking” is a reference to clause 12.4(f) of this Undertaking.
4. A reference to “Total Actual Revenue” is a reference to Total Actual Revenue as defined under this Undertaking.
5. A reference to “Individual Coal System Infrastructure” is a reference to the System Reference Tariff that is used to set the Access Charges for the relevant Train Services, subject to item 7 below.
6. A reference to “System Allowable Revenue” is a reference to Allowable Revenue as defined under this Undertaking.
7. A reference to “Access Agreements in relation to that Individual Coal System Infrastructure” is a reference to Tariff Based Access Agreements in relation to the relevant System Reference Tariff.
8. A reference to “the Total Revenue for that Individual Coal System Infrastructure” is a reference to “the Total Revenue” in relation
An Access Agreement that was executed or renewed on or after 23 October 2008 but prior to 1 October 2010.
A New Access Agreement where the relevant Old Access Agreement was executed on or 23 October 2008 but prior to 1 October 2010.
Clause 2.2, Part B, Schedule F of the 2008 Undertaking
4 Access Agreements for coal carrying Train Services executed or renewed under the 2005 Undertaking or 2008
Undertaking (except for a Customer initiated transfers of UT1 Access Agreements) (UT2 Access Agreements) will have Access Charges for Train Services in a Coal System set based on the relevant System Reference Tariff for that Coal System. Train Services under UT2 Access Agreements will not have Access Charges set based on any Expansion Tariff for that Coal System. The relevant System Gtk or gtk should be limited to those Train Services whose Access Charges are set based on the same System Reference Tariff as the relevant Train Services for which a Take or Pay is being calculated.
Column 1 Column 2 Column 3
to the relevant System Reference Tariff.
3.3 Application of new Take or Pay arrangements
(a) This clause 3.3 describes the application of the Take or Pay
obligations contained in Access Agreements that were originally
entered into in accordance with the 2010 Undertaking, the 2016
Undertaking and this Undertaking. Nothing in this clause 3.3 applies
to a 2001/05/08 Access Agreement. (Note: Take or Pay in the
context of new Expansions is addressed in clause 3.3(n) below.)
(b) Subject to clause 3.3(n) which applies to Take or Pay in the context
of Expansions, where the Access Holder has a Take or Pay with
Aurizon Network under an Access Agreement that is not a 2001/05/08
Access Agreement, the Take or Pay will be calculated as follows:
(i) first, the maximum potential Take or Pay will be calculated
based on clauses 3.3(d) to (f); and
(ii) second, clause 3.3(h) will be applied to determine whether
any Take or Pay liability exists; and
(iii) third, if Take or Pay liability exists, for the purpose of
calculating Tariff Take or Pay in relation to a System
Reference Tariff and to that extent only, the maximum
potential Take or Pay will be adjusted by applying each of:
(A) clause 3.3(j) (Mine capping); and
(B) clause 3.3(k) to (m) (Tariff capping),
as applicable and in that order to determine the actual Take
or Pay payable to Aurizon Network.
(c) In relation to Take or Pay charges in the context of a Pre-Approval
Date Coal Access Agreement where the Access Holder is not a Train
Operator, Take or Pay charges will be payable under that Access
Agreement (including in relation to the non-operation of Train
Services under any relevant train operations agreement). Take or Pay
charges will not be payable to Aurizon Network by a Train Operator
under a train operations agreement relevant to that Access Holder.
(d) Subject to clauses 3.3(h) to (m), Take or Pay charges applicable to
an Access Holder will be:
(i) determined for each Year;
(ii) invoiced for each Year following completion of that Year; and
(iii) calculated as the amount which is 100% of the amount
calculated as:
where:
(A) each of AT2, AT3 and AT4 inputs for that Access
Holder’s Access Charges at the rate applicable in
that Year;
(B) the nt and ntk (as applicable) are calculated by:
(1) the aggregate nt and ntk (as applicable)
that would have been achieved for the
relevant Year had the full contracted
entitlement been railed for the relevant
Train Services; less
(2) the aggregate nt and ntk (as applicable)
not railed for the relevant Year due to the
non-operation of Train Services for an
Aurizon Network Cause; less
(3) the aggregate nt and ntk (as applicable)
railed for the relevant Year; and
(C) NTS is calculated as:
(1) the number of Train Services that the
Access Holder would have operated for
the relevant Year had the full contracted
entitlement been railed for the relevant
Train Services; less
(2) the number of those Train Services that
either:
were not able to be operated solely
as a result of an Aurizon Network
Cause; or
ntAT1000
ntkATNTSrtpAT 432
were operated (whether loaded or
empty) during that Year,
provided always that the amount of Take or Pay for a relevant Year
must not be less than zero.
(e) To calculate nt and ntk for the purpose of clause 3.3(d)(iii)(B)(1) and
(2), Aurizon Network must:
(i) identify from the Access Agreement the number of Train
Services that would have operated had the full contracted
entitlement been used; and
(ii) determine the number of Train Services that did not operate
under that contracted entitlement due to an Aurizon Network
Cause, provided that if an Access Holder has more than one
Access Agreement for the same origin to destination pair,
Aurizon Network must allocate those Train Services as
between the relevant Access Agreements in the order in
which those Access Agreements were executed (unless the
relevant Access Holder has nominated a different order, in
which case that order must be applied),
and calculate the nt and ntk by using a train payload as reasonably
determined by Aurizon Network in respect of the relevant Reference
Tariff.
(f) For the purpose of calculating Take or Pay charges, the calculation
will be based on the origin and destination specified in the relevant
Train Service Entitlement (provided that the Nominated Loading
Facilities of RG Tanna Terminal and Barney Point will be treated as
the same destination for the purposes of such a calculation).
(g) For the purpose of calculating Take or Pay charges, an Access
Holder’s entitlement to operate Train Services is, without limitation,
determined by reference to the Train Services that could have been
operated in accordance with the Access Holder’s Train Service
Entitlement including even if:
(i) where the Access Holder is not a Train Operator:
(A) the Access Holder has not nominated a Train
Operator to utilise Access Rights relevant to all or
any of the Train Services;
(B) either:
(1) the Access Holder must ensure a Train
Operator does not operate; or
(2) Aurizon Network suspends the right of the
Access Holder to have a Train Operator
operate,
all or any of the Train Services; or
(C) under the relevant train operations deed, either:
(1) the relevant Train Operator must not
operate; or
(2) Aurizon Network suspends the right of the
relevant Train Operator to operate,
all or any of the Train Services; or
(ii) where the Access Holder is a Train Operator, the Access
Holder must not operate, or Aurizon Network suspends the
right of the Access Holder to operate, all or any of the Train
Services,
except to the extent of any express exceptions specified in the Access
Holder’s Access Agreement for the purpose of calculating Take or
Pay charges where the Access Holder is taken to not have an
entitlement to operate Train Services.
Take or Pay trigger
(h) For the purpose of calculating Tariff Take or Pay in relation to a
System Reference Tariff and to that extent only, the Tariff Take or
Pay for a Year is not payable for that Year where the aggregate of the
gtk for all coal carrying Train Services, to the extent that the Access
Charges for those Train Services are set by reference to the relevant
Reference Tariff, operated for that Year exceeds the amount
calculated as:
(i) 100% of the Gtk Forecast identified for that Year for that
Reference Tariff; less
(ii) the gtk not achieved due to the non-operation of Train
Services for an Aurizon Network Cause.
(i) Where Tariff Take or Pay for a System Reference Tariff is being
determined, clauses 3.3(j) and (m) only apply where Tariff Take or
Pay is payable after clause 3.3(h) has been applied.
Mine capping
(j) If:
(i) Train Services operated in relation to an origin to destination
in respect of a person (End User) who is either the
Customer for those Train Services or the Access Holder for
those Train Services (but who has no Customer) under an
Access Agreement, exceed the Train Service Entitlement in
that Access Agreement (Exceeded Agreement); and
(ii) there is another Access Agreement (excluding Access
Agreements executed or renewed prior to 1 October 2010,
and New Access Agreements where the relevant Old Access
Agreement was executed or renewed within the same
period) (Other Agreement) with Train Service Entitlements
for that same origin to destination and that End User that
have not been exceeded,
then the Take or Pay liability under the Other Agreement will be
reduced by the amount of the additional revenue from Access
Charges for AT2-4 from those excess Train Services under the
Exceeded Agreement but only to the extent that both that Take or Pay
liability and those Access Charges are set by reference to the same
Reference Tariff. For clarity:
(iii) where the additional revenue is greater than the Take or Pay
liability under one or more Other Agreements, that additional
revenue may be used to reduce the Take or Pay liability
under those Other Agreements (where there is more than
one Other Agreement, the reduction will be pro-rated, on the
basis of the total revenue from AT2-4 that Aurizon Network is
entitled to earn over the relevant Year under each of those
Other Agreements, assuming Train Services were operated
with a Nominal Train Payload); and
(iv) the additional revenue from an Exceeded Agreement can
only be used for a reduction of Take or Pay liability under
this clause 3.3(j) in respect of the Year in which that
additional revenue arose and cannot be accrued, rolled over
or otherwise used to reduce a Take or Pay liability for any
other Year.
Tariff capping
(k) Clause 3.3(l) must only be applied after clause 3.3(j) (if applicable)
has been applied.
(l) Subject to clause 3.3(m), and to clause 3.3(j) (if applicable) having
first been applied, where the Total Actual Revenue for AT2-4 in relation
to Access Charges set by reference to the relevant Reference Tariff
less the aggregate amount of Tariff Take or Pay that Aurizon Network
is entitled to earn from all Access Agreements executed or renewed
on or after 30 June 2006 (other than any new or varied Access
Agreement to the extent entered or varied as part of transferring
Access Rights from existing Access Agreements in place on the day
immediately prior to 30 June 2006 under a provision of the Access
Agreement which permits the transfer of Access Rights) (Total
Revenue) is:
(i) greater than or equal to the Allowable Revenue for AT2-4 in
relation to the relevant Reference Tariff, Tariff Take or Pay is
not payable for that Year under those Access Agreements
(Full Take or Pay Agreements); or
(ii) less than the Allowable Revenue for AT2-4 in relation to that
Reference Tariff:
(A) Aurizon Network must calculate the aggregate
amount of Tariff Take or Pay that Aurizon Network
is entitled to earn from all Full Take or Pay
Agreements (Total Actual Take or Pay); and
(B) if the Total Actual Take or Pay exceeds the amount
by which the Allowable Revenue for AT2-4 in
relation to the relevant Reference Tariff exceeds
the Total Revenue from Access Charges set by
reference to the relevant Reference Tariff
(Maximum Take or Pay Amount), then:
(1) Aurizon Network must calculate for each
relevant Access Holder, the proportion
that the Access Holder’s Tariff Take or
Pay amount bears to the Total Actual
Take or Pay (Proportion); and
(2) each relevant Access Holder’s Tariff Take
or Pay amount will be reduced to equal
that Access Holder’s Proportion of the
Maximum Take or Pay Amount.
(m) In determining what Aurizon Network would be entitled to earn for the
purposes of clause 3.3(l), Aurizon Network is deemed to have
contracted on the terms of the relevant Standard Access Agreement
(as defined under the Applicable Undertaking) that applied on the
date of execution or renewal of an Access Agreement, except for:
(i) those Access Agreements which have been altered by
agreement from that form in a manner consistent with the
terms of any Approved Undertaking or approval of the QCA,
in which case Aurizon Network's entitlement will be
calculated in accordance with the terms of such Access
Agreements; and
(ii) a New Access Agreement to the extent entered into as part
of transferring Access Rights from an Old Access Agreement
executed under the 2001 Undertaking, under a provision of
the Access Agreement which permits the transfer of Access
Rights, in which case Aurizon Network's entitlement to Tariff
Take or Pay amounts will be calculated on the basis that
Aurizon Network has contracted on the terms of the relevant
Standard Access Agreement (as defined under the 2001
Undertaking) that applied on the date of execution of that
Old Access Agreement.
Take or Pay for Expansions
(n) In relation to Take or Pay in the context of an Expansion Tariff:
(i) The Take or Pay amount for an Access Holder that is
required to pay an Expansion Tariff will be calculated in
accordance with:
(A) the formulae in clause 3.3(d)(iii); plus
(B) AT5 x egtk / 1000;
where the egtk is calculated by:
(C) the aggregate egtk that would have been achieved
for the relevant Year had the full contracted
entitlement been railed for the relevant Train
Services; less
(D) the aggregate egtk not railed for the relevant Year
due to the non-operation of Train Services for an
Aurizon Network Cause; less
(E) the aggregate egtk railed for the relevant Year;
provided always that the amount of Take or Pay for the Year
must not be less than zero.
(ii) In order to calculate egtk for the purposes of this clause,
Aurizon Network will:
(A) identify from the Access Agreement the number of
Train Services that would have operated had the
full contracted entitlement been used;
(B) determine the number of Train Services that did not
operate under that contracted entitlement due to an
Aurizon Network Cause; and
(C) convert this to egtk by using the Nominal Train
Payload for the relevant Reference Tariff as
reasonably determined by Aurizon Network.
(iii) For the avoidance of doubt:
(A) there is no Take or Pay trigger test – ie,
clause 3.3(h) does not apply; and
(B) there are no capping mechanisms – ie,
clauses 3.3(j) to 3.3(m) do not apply.
4 Annual review of Reference Tariffs
4.1 Requirement for annual review of Reference Tariffs
(a) Prior to the beginning of each Year during the Term (except for the
first Year) each Reference Tariff will be adjusted by Aurizon Network
to reflect the variations to the applicable Allowable Revenue:
(i) for the relevant Year due to an adjustment to Second Year
Allowable Revenue under clause 4.4; and
(ii) for the relevant Year and each subsequent Year during the
Term in accordance with clause 4.1(b).
(b) Aurizon Network will submit to the QCA by 28 February of each Year
during the Term:
(i) a revised Gtk Forecast for each Reference Tariff for the next
Year;
(ii) details of the methodology, data and assumptions used to
estimate the revised Gtk Forecast; and
(iii) the proposed adjustments, for each Reference Tariff, arising
from any difference between the relevant revised Gtk
Forecast and the Gtk Forecast used for the purpose of
determining the Allowable Revenue for that Reference Tariff,
to:
(A) the Allowable Revenue for the Reference Tariff for
each subsequent Year during the Term; and
(B) the Reference Tariff for the next Year.
(c) If, after receiving a submission under clause 4.1(b), the QCA
considers that an error has been made in the proposed revised Gtk
Forecast or adjustments to Allowable Revenue or Reference Tariffs,
then:
(i) the QCA will endeavour to notify Aurizon Network within forty
(40) Business Days, providing details of the error and how
the proposal needs to be amended in order for the QCA to
approve it; and
(ii) after receiving that notice, Aurizon Network must within ten
(10) Business Days either:
(A) show why it does not consider that the error has
been made; or
(B) resubmit a corrected version of the submission.
(d) The QCA may approve the revised Gtk Forecast, Allowable Revenues
and Reference Tariffs if it considers that the revised Gtk Forecast is
reasonable and the consequential adjustments to Allowable
Revenues and Reference Tariffs are calculated properly.
(e) If Aurizon Network does not make a submission under clause 4.1(b)
in respect of a Year by 28 February, then no adjustments to the Gtk
Forecast, Allowable Revenues or Reference Tariffs for that Year will
be made under this clause 4.1.
4.2 Allowable Revenue
(a) Subject to clause 4.2(b), the Allowable Revenue:
(i) for AT2-4 in relation to a Reference Tariff for a Year, is the
total revenue from AT2-4 arising from all Tariff Based Access
Agreements in relation to that Reference Tariff that Aurizon
Network is entitled to earn over the relevant Year as
specified in the Reference Tariff (for example, as specified in
clauses 7.3, 8.3, 9.3, 10.3 and 11.3 of Schedule F, as
applicable), as amended from time to time, and as adjusted
or varied in accordance with this Schedule F (but, for clarity,
excluding any Adjusted Allowable Revenue); and
(ii) for the AT5 component of Access Charges in relation to a
Reference Tariff for a Year, is the total revenue from the AT5
component of Access Charges arising from all Tariff Based
Access Agreements in relation to that Reference Tariff that
Aurizon Network is entitled to earn over the relevant Year as
specified in the Reference Tariff (for example, as specified in
clauses 7.3 and 8.3 of Schedule F, as applicable) as
amended from time to time, and as adjusted or varied in
accordance with this Schedule F.
(b) Unless otherwise agreed with the QCA, when calculating Allowable
Revenue in relation to the Origin Tariff and the Destination Tariff for a
Cross System Train Service, regardless of when the Cross System
Train Service commenced:
(i) for the Allowable Revenue for AT2-4:
(A) the sum of the following components of Access
Charges that Aurizon Network would be expected
to earn in respect of a forecast Cross System Train
Service:
(1) the AT2 components calculated based on
the relevant Destination Tariff and on
clause 2.3(a)(ii) of Schedule F; and
(2) 50% of the AT3 components calculated
based on the relevant Destination Tariff,
will be allocated to Allowable Revenue for the
Destination Tariff; and
(B) all other Access Charges attributable to AT2-4 which
Aurizon Network would be expected to earn in
respect of a forecast Cross System Train Service
calculated based on the Origin Tariff applicable to
that Cross System Train Service, will be allocated
to the Allowable Revenue of the Origin Tariff; and
(ii) for the Allowable Revenue for AT5, the AT5 component of
Access Charges that Aurizon Network would be expected to
earn in respect of a forecast Cross System Train Service,
calculated based on:
(A) the Origin Tariff and the egtk in the Origin System,
will be allocated to the Allowable Revenue for the
Origin Tariff; and
(B) the Destination Tariff and the egtk in the
Destination System, will be allocated to the
Allowable Revenue for the Destination Tariff.
4.3 Calculation of Revenue Adjustment Amounts
Obligation to calculate Revenue Adjustment Amounts
After the end of each Year, Aurizon Network will calculate for that Year for
each Reference Tariff:
(a) an AT2-4 Revenue Adjustment Amount for that Reference Tariff by
subtracting:
(i) the Adjusted Allowable Revenue for AT2-4 (calculated under
clause 4.3(c)) for that Reference Tariff; from
(ii) the Total Actual Revenue for AT2-4 (calculated under
clause 4.3(d)) in relation to that Reference Tariff,
for that Year; and
(b) an AT5 Revenue Adjustment Amount for that Reference Tariff by
subtracting:
(i) the Adjusted Allowable Revenue for AT5 (calculated under
clause 4.3(c)) for that Reference Tariff; from
(ii) the Total Actual Revenue for AT5 (calculated under
clause 4.3(g)) in relation to that Reference Tariff,
for that Year.
Calculation of Adjusted Allowable Revenue
(c) The Adjusted Allowable Revenue for AT2-4 or the AT5 component of
Access Charges in relation to a Reference Tariff is the sum of the
following components of the applicable Allowable Revenue (as
relevant to the applicable Allowable Revenue):
(i) the component relating to the recovery of Aurizon Network’s
maintenance costs, adjusted to reflect the difference
between:
(A) the actual MCI value for the relevant Year; and
(B) the forecast MCI value that was used for the
purpose of determining the relevant Reference
Tariff for the relevant Year;
(ii) the component relating to the recovery of Aurizon Network’s
operating costs, excluding those costs referred to in
clause 4.3(c)(i), adjusted to reflect the difference between:
(A) the actual CPI and WPI values for the relevant
Year; and
(B) the forecast CPI and WPI values that was used for
the purpose of determining the relevant Reference
Tariff for the relevant Year (respectively);
(iii) the components relating to the recovery of Aurizon
Network’s costs associated with the connection of Aurizon
Network’s electrical traction system to an electricity
transmission or distribution network, adjusted to reflect the
difference between:
(A) the actual costs for the relevant Year; and
(B) the forecast costs used for the purpose of
determining the relevant Reference Tariff for the
relevant Year;
(iv) the components relating to the recovery of Aurizon
Network’s costs for the cost of audits required under this
Undertaking by the QCA for the relevant Year, but only to
the extent that the QCA has approved in writing the relevant
audit costs as efficiently incurred and such costs are not
already recoverable by Aurizon Network elsewhere in this
Undertaking;
(v) the components relating to the recovery of Aurizon Network's
costs for the cost of any Conditions Based Assessment
required under this Undertaking by the QCA for the relevant
Year, but only to the extent that the QCA has approved in
writing the relevant Condition Based Assessment costs as
efficiently incurred and such costs are not already
recoverable by Aurizon Network elsewhere in this
Undertaking;
(vi) the component relating to the recovery of Aurizon Network’s
costs for ground penetrating radar measurement, but only to
the extent that these costs have been prudently and
efficiently incurred and are not already recoverable by
Aurizon Network elsewhere in this Undertaking;
(vii) the components relating to the payment by Aurizon Network
of rebates relating to the capital components of Access
Charges attributable to the use of all or part of specified
assets relating to the relevant Reference Tariff (other than
under a User Funding Agreement), adjusted to reflect the
difference between:
(A) the actual payment of rebates made under those
agreements for the applicable assets; and
(B) the forecast payments of those rebates used for the
purpose of determining the relevant Reference
Tariff for the relevant Year;
(viii) the components relating to the recovery of Aurizon Network's
costs relating to, or arising out of compliance with this
Undertaking that were not allowed for in the determination of
the relevant Reference Tariff, but only to the extent that the
QCA has approved in writing the relevant costs as efficiently
incurred and such costs are not already recoverable by
Aurizon Network elsewhere in this Undertaking; and
(ix) all components excluding those costs referred to in any of
clauses 4.3(c)(i) to (viii).
Calculation of Total Actual Revenue for AT2-4
(d) The Total Actual Revenue for AT2-4 in relation to the relevant
Reference Tariff is the sum of:
(i) total revenue from AT2-4, including all revenue from Overload
Charges and any Ancillary Revenues relating to maintaining
connections to Private Infrastructure (except to the extent
that costs associated with maintaining connections to any
Private Infrastructure are not specifically allowed for in the
relevant Reference Tariff), for coal carrying Train Services,
in relation to the relevant Reference Tariff that operated in
the Year, that Aurizon Network would have earned
(regardless of what it actually earned or collected), if that
revenue were calculated consistent with the following:
(A) for a Train Service that is:
(1) consistent with the relevant Reference
Train Service; and
(2) is not a Cross System Train Service,
the AT2, AT3 and AT4 components of the relevant
Reference Tariff;
(B) for a Cross System Train Service that is consistent
with the relevant Reference Train Service (to the
extent that the relevant Reference Tariff applies),
that part of the AT2, AT3 and AT4 components of
the relevant Reference Tariff allocated consistently
with the method used in the calculation of the
relevant Allowable Revenue under clause 4.2(b);
(C) for a Train Service that varies from the relevant
Reference Train Service due to it not complying
with:
(1) clause 1.3(b)(v), the AT2 component of
the Access Charge (where the Access
Charge varies from the Reference Tariff
under clause 6.2.3(c) of this Undertaking)
and the AT3 and AT4 components of the
relevant Reference Tariff; or
(2) any other part of clause 1.3(b), (d) or (e)
(other than clause 1.3(b)(v) – with which
it complies), the AT2, AT3 and AT4
components of the relevant Reference
Tariff; or
(D) for a Train Service where the QCA has otherwise
approved an Access Charge that differs from the
relevant Reference Tariff, the amount of the AT2,
AT3 and AT4 components of the relevant Access
Charge;
(ii) the amount of all Take or Pay and, subject to clause 4.3(e),
Relinquishment Fees and Transfer Fees which Aurizon
Network would be entitled to be paid in the relevant Year
under Tariff Based Access Agreements, for coal carrying
Train Services, in relation to the relevant Reference Tariff
(or, for a Cross System Train Service, to the extent the
relevant Reference Tariff applies to the setting of Access
Charges for that Cross System Train Service) calculated on
the basis that Aurizon Network is deemed to have contracted
on the terms of the relevant Standard Access Agreement (as
defined under the Applicable Undertaking) that applied on
the date of execution or renewal of an Access Agreement,
except for:
(A) those Access Agreements which have been altered
from the relevant Standard Access Agreement in
accordance with any Approved Undertaking or as
approved by the QCA, for which Aurizon Network’s
entitlement to Take or Pay amounts,
Relinquishment Fees or Transfer Fees will be
calculated in accordance with the terms of those
Access Agreements; and
(B) a New Access Agreement to the extent entered into
as part of transferring Access Rights from an Old
Access Agreement executed under the 2001
Undertaking, under provisions of the Access
Agreement which permits the transfer of Access
Rights, which has not been renewed after 30 June
2006, for which Aurizon Network’s entitlement to
Take or Pay amounts, Relinquishment Fees and
Transfer Fees will be calculated on the basis that
Aurizon Network has contracted on the terms of the
relevant Standard Access Agreement (as defined
under the 2001 Undertaking) that applied on the
date of execution of that Old Access Agreement;
and
(iii) all revenue from AT2-4 that Aurizon Network would have
been entitled to earn under a Tariff Based Access
Agreement in relation to the relevant Reference Tariff during
the relevant Year but for:
(A) Aurizon Network’s wrongful act or omission which
act or omission was intentional and deliberate
whether or not Aurizon Network was aware that the
act or omission was wrongful; or
(iii)(B) Aurizon Network’s breach of that Access
Agreement or negligence in the provision of Below
Rail Services to the extent that such events of
breach or negligence resulted in the non-provision
of 5% or more of the total number of Train Services
for any single origin-destination pair during the
relevant Year (provided that, where Access Rights
are held by a party that is not a Train Operator, the
5% threshold is measured across the number of
Train Services for each single origin to destination
pair under that Access Agreement, not any relevant
train operations deed),
less any interest comprised in those amounts representing interest
paid or payable to Aurizon Network in relation to Access Charges
(including any Adjustment Charges). Where clause 4.3(d)(iii)(A)
applies in respect of a breach of an Access Agreement, clause
4.3(d)(iii)(A) applies to the exclusion of clause 4.3(d)(iii)(B).
(e) Subject to the QCA’s approval, Aurizon Network may reduce the
amount of any Relinquishment Fee or Transfer Fee used to calculate
Total Actual Revenue for a Year if its inclusion will have a material
effect on the AT2-4 Revenue Adjustment Amount.
(f) If Aurizon Network reduces the amount of any Relinquishment Fee or
Transfer Fee under clause 4.3(e) of Schedule F, then the amount of
the reduction must be carried forward to a following Year, including a
return on capital amount, calculated by reference to the Discount Rate
over the period starting on the first day of the Year in which the
Relinquishment Fee or Transfer Fee is received and ending on the
first day of the Year in which the Relinquishment Fee or Transfer Fee
is included in the calculation of Total Actual Revenue.
Calculation of Total Actual Revenue for the AT5 component of Access
Charges
(g) The Total Actual Revenue for the AT5 component of Access Charges
in relation to the relevant Reference Tariff is the sum of:
(i) total revenue from the AT5 component of Access Charges
arising from all Tariff Based Access Agreements, for coal
carrying Train Services, in relation to the relevant Reference
Tariff that Aurizon Network has actually earned over the
relevant Year (whether or not actually collected by Aurizon
Network), calculated using:
(A) for a Train Service for which clause 6.9.1(b) of this
Undertaking applies, the amount of the AT5
component of the relevant Access Charges; or
(B) if paragraph (A) does not apply:
(1) for a Cross System Train Service that is
consistent with the relevant Reference
Train Service, the AT5 component of the
relevant Reference Tariff allocated
consistently with the method used in the
calculation of the relevant Allowable
Revenue under clause 4.2(b); or
(2) where paragraph (1) does not apply, the
AT5 component of the relevant Reference
Tariff; and
(ii) all revenue from the AT5 component of Access Charges that
Aurizon Network would have been entitled to earn under a
Tariff Based Access Agreement in relation to the relevant
Reference Tariff during the relevant Year but for:
(A) Aurizon Network’s wrongful act or omission which
act or omission was intentional and deliberate
whether or not Aurizon Network was aware that the
act or omission was wrongful; or
(ii)(B) Aurizon Network’s breach of that Access
Agreement or negligence in the provision of Below
Rail Services to the extent that such events of
breach or negligence resulted in the non-provision
of 5% or more of the total number of Train Services
for any single origin-destination pair during the
relevant Year (provided that, where Access Rights
are held by a party that is not a Train Operator, the
5% threshold is measured across the number of
Train Services for each single origin to destination
pair under that Access Agreement, not any relevant
train operations deed),
less any interest comprised in those amounts representing interest
paid or payable to Aurizon Network in relation to Access Charges
(including any Adjustment Charges). Where clause 4.3(g)(ii)(A)
applies in respect of a breach of an Access Agreement, clause
4.3(g)(ii)(A) applies to the exclusion of clause 4.3(g)(ii)(B).
Approval of Revenue Adjustment Amounts
(h) Aurizon Network will submit to the QCA by 30 September after the
end of each Year of the Term details of the methodology, data and
assumptions used to calculate the Revenue Adjustment Amounts for
that Year under this clause 4.3 and clause 4.4 provided that if, in that
September, Adjustment Charges have not yet been approved relating
to the relevant Year, then Aurizon Network is only required to submit
the relevant information within thirty (30) days after those Adjustment
Charges have been approved.
(i) The QCA may give Aurizon Network a notice requiring Aurizon
Network to submit the Revenue Adjustment Amounts, if Aurizon
Network fails to do so under clause 4.3(h).
(j) The QCA may grant Aurizon Network an extension of the time for
submitting, or resubmitting, the Revenue Adjustment Amounts if:
(i) Aurizon Network provides a written request to the QCA for
an extension of time; and
(ii) the extension of time is reasonable or necessary.
If an extension of time is granted, Aurizon Network will submit the
Revenue Adjustment Amounts within the time specified by the QCA.
(k) The QCA may calculate Revenue Adjustment Amounts that are
consistent with the requirements specified in this clause 4.3:
(i) if Aurizon Network does not comply with a notice from the
QCA under clause 4.3(h) or 4.3(n)(ii); or
(ii) if the QCA, under clause 4.3(n)(ii), refuses to approve the
Revenue Adjustment Amounts resubmitted by Aurizon
Network.
(l) Where Aurizon Network submits the Revenue Adjustment Amounts
under clause 4.3(h), the QCA may, to the extent it considers it
appropriate to do so:
(i) publish details of the Revenue Adjustment Amounts; and
(ii) invite and consider comments from stakeholders
regarding the Revenue Adjustment Amounts.
To the extent that such comments are provided, the QCA must give
Aurizon Network a reasonable period to respond to those comments.
(m) The QCA will approve any Revenue Adjustment Amounts if the QCA
is reasonably satisfied that they have been calculated in accordance
with this clause 4.3.
(n) If the QCA:
(i) approves the Revenue Adjustment Amounts, the QCA will
give Aurizon Network a notice stating the reasons for the
QCA’s decision; or
(ii) refuses to approve the Revenue Adjustment Amounts, the
QCA will give Aurizon Network a notice:
(A) stating the reasons for its refusal and the way in
which it considers that the Revenue Adjustment
Amounts should be amended; and
(B) requiring Aurizon Network to amend the Revenue
Adjustment Amounts in that way and to resubmit
the Revenue Adjustment Amounts to the QCA
within thirty (30) days after Aurizon Network
receives that notice.
(o) Aurizon Network must comply with a notice under clause 4.3(n)(ii).
(p) The QCA may approve Revenue Adjustment Amounts resubmitted by
Aurizon Network or developed by the QCA under clause 4.3(j), if it is
satisfied that they:
(i) are consistent with the matters specified under clause 4.3(l);
and
(ii) if a notice has been issued under clause 4.3(n)(ii), have
been amended or developed in accordance with that notice.
(q) Despite any other provision in this Undertaking, in deciding whether to
approve any Revenue Adjustment Amounts (and in requiring Aurizon
Network to amend any Revenue Adjustment Amounts in any notice
given under clause 4.3(n)(ii)) the QCA will include an amount of
revenue (in calculating the Total Actual Revenue for the AT2-4
component of Access Charges or the the Total Actual Revenue for
the AT5 component of Access Charges) that the QCA estimates
acting reasonably is attributable to Aurizon Network’s wrongful act or
omission in accordance with clause 4.3(d)(iii)(A) or clause 4.3(g)(ii)(A)
(as applicable). The QCA may require Aurizon Network to include an
amount of revenue in calculating the Total Actual Revenue for the
AT2-4 component of Access Charges or the the Total Actual Revenue
for the AT5 component of Access Charges in accordance with this
clause 4.3(q) whether or not Aurizon Network’s Revenue Adjustment
Amounts included any amount of revenue in accordance with clause
4.3(d)(iii)(A) or clause 4.3(g)(ii)(A).
(q)(r) Despite any other provision of this Undertaking, to the extent that:
(i) Adjustment Charges have been approved for a Year;
(ii) Aurizon Network is entitled or obliged to recover or
reimburse those Adjustment Charges from or to Access
Holders;
(iii) Aurizon Network is obliged under this Undertaking to
calculate Revenue Adjustment Amounts in respect of that
Year; and
(iv) in recovering or reimbursing the Adjustment Charges, the
Adjustment Charges are included in an invoice relating to a
Billing Period in the Year in which the relevant Revenue
Adjustment Amounts are required to be calculated,
then, the Total Actual Revenue for AT2-4 or AT5 for each relevant Coal
System for that Year and the Year in which the relevant Revenue
Adjustment Amounts are required to be calculated must be adjusted
to take account of the Adjustment Charges (but excluding the interest
component of those Adjustment Charges).
4.4 Revenue adjustment
(a) Where a Revenue Adjustment Amount has been approved by the
QCA under clause 4.3:
(i) the equivalent Allowable Revenue to that used in the
calculation of that Revenue Adjustment Amount for the
relevant Reference Tariff for the Year after the Year in which
that Revenue Adjustment Amount was calculated (that is,
the Second Year Allowable Revenue) must be adjusted in
accordance with this clause 4.4; and
(ii) the Allowable Revenue for all subsequent Years must also
be adjusted to reflect the actual change in the MCI, CPI and
WPI as used in the calculation of the approved Revenue
Adjustment Amount.
(b) A Second Year Allowable Revenue will be adjusted as follows:
(i) for an AT2-4 Revenue Adjustment Amount, by subtracting
from the relevant Second Year Allowable Revenue:
(A) that AT2-4 Revenue Adjustment Amount; and
(B) a return on capital amount, calculated by reference
to the Discount Rate as applied to the AT2-4
Revenue Adjustment Amount over the period
starting on the first day of the Year in which the
Revenue Adjustment Amount is calculated and
ending on the last day of the Year following that
Year; and
(ii) for an AT5 Revenue Adjustment Amount, by subtracting from
the relevant Second Year Allowable Revenue:
(A) that AT5 Revenue Adjustment Amount; and
(B) a return on capital amount, calculated by reference
to the Discount Rate as applied to the AT5 Revenue
Adjustment Amount over the period starting on the
first day of the Year in which the Revenue
Adjustment Amount is calculated and ending on the
last day of the Year following that Year.
(c) Where a Second Year Allowable Revenue is adjusted under this
clause 4.4, Aurizon Network must vary the relevant Reference Tariff
as part of the adjustment of the relevant Reference Tariff under
clause 4.1(a).
5 Reference Tariff variations
5.1 Obligation to submit Reference Tariff variations
(a) Aurizon Network:
(i) may submit a Reference Tariff variation to the QCA, where
Aurizon Network considers that the variation will promote
efficient investment by either Aurizon Network or another
person in the Supply Chain; or
(ii) must submit a Reference Tariff variation to the QCA, subject
to clause 5.6:
(A) within sixty (60) days after:
(1) Aurizon Network becomes aware that an
Endorsed Variation Event has occurred or
a Review Event has occurred or will occur;
or
(2) a notice being given to Aurizon Network
by the QCA under clause 5.1(b); or
(B) by 28 February prior to each Year of the Term, in
accordance with clause 4.1(a) (if applicable).
(b) The QCA may give Aurizon Network a notice requiring Aurizon
Network to submit a Reference Tariff variation if Aurizon Network fails
to submit a Reference Tariff variation within sixty (60) days, subject to
clause 5.6, after the QCA determines, and notifies Aurizon Network,
that an Endorsed Variation Event or a Review Event has occurred.
(c) The QCA may develop a Reference Tariff variation that is consistent
with the requirements specified in this clause 5:
(i) if Aurizon Network does not comply with a written notice
given by the QCA under clause 5.1(b) or clause 5.5(e)(ii)
for it to submit, or resubmit, a Reference Tariff variation; or
(ii) if the QCA refuses to approve a Reference Tariff variation
resubmitted by Aurizon Network in accordance with a notice
given by the QCA under clause 5.5(e)(ii).
(d) A Reference Tariff variation under this clause 5 will include a revised
Gtk Forecasts and Allowable Revenues to the extent applicable to
that Reference Tariff variation.
5.2 Endorsed Variation Events
The occurrence of any of the following events is an Endorsed Variation Event:
(a) a Change in Law or a Change in Relevant Taxes occurs, that either
alone or in combination with all other Changes in Law or Changes in
Relevant Taxes that have occurred since the Commencing Date,
would cause a change in the costs reflected in the AT3, AT4, and/or
AT5 input of the relevant Reference Tariff of greater than 2.5%
excluding the impact of any Change in Law or Change in Relevant
Taxes that have previously resulted in a variation of the Reference
Tariff;
(b) a change in the pricing of one or more Distribution Entities and/or
Transmission Entities that, either alone or in combination with all other
changes in the pricing of relevant Distribution Entities and/or
Transmission Entities that have occurred since the Commencing Date
and that have not previously resulted in a variation of the Reference
Tariff, would cause a change in the costs reflected in the AT5 input of
the relevant Reference Tariff of greater than 2.5%; or
(c) the QCA Levy input of a relevant Reference Tariff is reviewed (taking
into account any over or under recovery of fees via the QCA Levy
component of Access Charges in the previous Year) following the
QCA’s announcement of its fees for the provision of regulatory
services for the rail industry.
5.3 Review Event
The occurrence of a Force Majeure Event – of the type set out in either
paragraph (e), (l) or (m) of the definition of that term – affecting Aurizon
Network, to the extent that Aurizon Network has incurred or will incur additional
Incremental Costs of greater than $1 million that have not previously resulted in
a variation of the relevant Reference Tariff, is a Review Event in respect of
which Aurizon Network has given written notice to the QCA of Aurizon
Network’s intention to propose a variation to that Reference Tariff under this
clause 5.
5.4 Requirements for submissions
Where Aurizon Network submits a Reference Tariff variation, the variation
must:
(a) nominate the Reference Tariff to be varied;
(b) include details of the methodology, data and assumptions used to
vary the Reference Tariff;
(c) for a variation under clause 5.1(a)(i), include information on:
(i) the matters set out in clause 6.6 (Pricing limits) of this
Undertaking; and
(ii) why Aurizon Network considers that the variation of the
Reference Tariff will promote efficient investment by either
Aurizon Network or another person in the Supply Chain; and
(d) for a variation in respect of an Endorsed Variation Event or a Review
Event, evidence that the Endorsed Variation Event or Review Event
has occurred or will occur.
5.5 Approval process
(a) The QCA may publish details of Aurizon Network's proposed
Reference Tariff variation and invite and consider comments from
stakeholders regarding the proposed variation.
(b) The QCA must give Aurizon Network a reasonable opportunity to
respond to any comments from stakeholders that the QCA considers
regarding the proposed variation. The QCA must consider all such
responses from Aurizon Network.
(c) The QCA may approve Aurizon Network’s proposed Reference Tariff
variation if the QCA is satisfied that:
(i) for a variation in respect of an Endorsed Variation Event:
(A) the Endorsed Variation Event has occurred; and
(B) the variation of the Reference Tariff is consistent
with the change in the forecast cost resulting from
the Endorsed Variation Event (including
incremental maintenance and incremental capital
costs), calculated as if all other assumptions
originally used for the determination of Reference
Tariffs are held constant;
(ii) for a variation in respect of a Review Event:
(A) the Review Event has occurred or will occur; and
(B) the variation of the relevant Reference Tariff:
(1) is consistent with the change in the cost
resulting from or that will result from the
Review Event; and
(2) reflects the impact of the relevant Review
Event on the financial position of Aurizon
Network (including the impact of
incremental maintenance and incremental
capital costs); and
(iii) for a variation in respect of either an Endorsed Variation
Event or a Review Event, whether the proposed variation
has been calculated as if all other Reference Tariffs were
also being recalculated due to the Endorsed Variation Event
or Review Event (as applicable).
(d) If the QCA approves a Reference Tariff variation:
(i) the QCA will give Aurizon Network a notice stating the
reasons for the QCA’s decision;
(ii) the Reference Tariff variation will apply, where the variation
arose as a result of:
(A) an Endorsed Variation Event:
(1) from the first day of the Month
immediately following the date of the
occurrence of the Endorsed Variation
Event; or
(2) where the date of the occurrence of the
Endorsed Variation Event is the first day
of a Month, from that date;
(B) an adjustment of Reference Tariffs under
clause 4.1, from 1 July of the Year following the
Year in which the variation was submitted; or
(C) a Review Event, from the date approved by the
QCA (being a date that may be before, on or after
the date on which the QCA approved that
Reference Tariff variation); and
(iii) Aurizon Network must:
(A) publish details of the Reference Tariff variation on
the Website; and
(B) advise Access Holders and Access Seekers, in
respect of the relevant Reference Train Service, of
the Reference Tariff variation.
(e) If the QCA refuses to approve a Reference Tariff variation, the QCA
will give Aurizon Network a notice:
(i) stating the reasons for its refusal and the way in which the
QCA considers that the variation should be amended; and
(ii) if that variation was required to be submitted by Aurizon
Network under this clause 5 in respect of an Endorsed
Variation Event or a Review Event, requiring Aurizon
Network to vary the Reference Tariff in the way the QCA
considers it appropriate and to resubmit the variation to the
QCA within twenty (20) Business Days after Aurizon
Network receiving the notice, subject to clause 5.6.
(f) Aurizon Network must comply with a notice given under
clause 5.5(e).
(g) When considering whether to approve a resubmitted Reference Tariff
variation or a Reference Tariff variation developed by the QCA under
clause 5.1(c), the QCA must take into account:
(i) the matters specified under clause 5.5(c) (as applicable);
and
(ii) if applicable, whether the variation has been amended or
developed in accordance with the QCA’s prior decision (if
any) to refuse to approve the relevant Reference Tariff
variation.
(h) For the purposes of clause 5.1:
(i) a Reference Tariff variation submitted by Aurizon Network or
developed by the QCA under clause 5.1 must include a
review of Allowable Revenue and Gtk Forecast to the extent
applicable to that variation; and
(ii) the QCA in approving a variation of a Reference Tariff must
also approve the corresponding variation of the applicable
Allowable Revenue and Gtk Forecast.
5.6 Extensions of time
(a) The QCA may grant Aurizon Network an extension of the time for
submitting, or resubmitting, a Reference Tariff variation if:
(i) Aurizon Network provides a written request to the QCA for
an extension of time which includes the reasons why Aurizon
Network requires the extension of time; and
(ii) the extension of time is reasonable or necessary.
(b) If the QCA grants Aurizon Network an extension of time under
clause 5.6(a), Aurizon Network must submit or resubmit the
Reference Tariff variation within the time specified by the QCA.
6 Adjustment Charges
6.1 Calculation of Adjustment Charges
(a) Subject to clause 6.3, if:
(i) this Undertaking specifies that a Reference Tariff is
applicable or effective from a date prior to the date on which
that Reference Tariff was approved by the QCA; or
(ii) a variation of a Reference Tariff (including a variation
approved under clause 5) is applicable or effective from a
date prior to the date on which the variation was approved
by the QCA,
Aurizon Network is entitled to recover from or will reimburse to, as
applicable, each relevant Access Holder (or, if applicable, Train
Operator if it pays a component of the Access Charges the amount
(Adjustment Amount) which is the sum of:
(iii) the aggregate of the differences, for each relevant Access
Holder (or, if applicable, Train Operator) for each calendar
Month (or part thereof) since the date on which the
Reference Tariff or the variation of the Reference Tariff was
to apply or take effect (Effective Date) until the date on
which that Reference Tariff was approved by the QCA or the
variation of the Reference Tariff was made, as applicable,
between:
(A) the Access Charges paid or payable by that Access
Holder (or, if applicable, Train Operator) in respect
of the Train Services operated by or for that Access
Holder (or, if applicable, Train Operator) during that
calendar Month (or part thereof); and
(B) the Access Charges that would have been paid or
payable by that Access Holder (or, if applicable,
Train Operator) in respect of those Train Services if
the Access Charges were calculated in accordance
with the Reference Tariff or the variation of the
Reference Tariff referred to in clause 6.1(a)(i) or
(ii) on and from the Effective Date; and
(iv) the aggregate of the interest calculated in accordance with
clause 6.1(b) in respect of the amount of each difference
comprising the amount calculated in accordance with
clause 6.1(a)(iii),
by making adjustments to the Access Charges (Adjustment Charge)
payable by Access Holders (or, if applicable, Train Operator if it pays
a component of the Access Charges so as to recover or reimburse, as
applicable, the Adjustment Amount (subject to the provisions of this
Undertaking). To the extent that the Access Holder (or, if applicable,
Train Operator) has not paid the original Access Charge to which an
Adjustment Charge relates, then the Adjustment Charge may be set
off against the amount payable by the Access Holder (or, if applicable,
Train Operator).
(b) The interest referred to in clause 6.1(a)(iv) must be calculated:
(i) in respect of the amount of each difference comprising the
amount calculated under clause 6.1(a)(iii);
(ii) on the basis that the interest:
(A) accrues and is charged from day to day; and
(B) is capitalised at the end of each Month and will
thereafter itself bear interest;
(iii) at the rate equal to, for interest accruing in a Month:
(A) the mid-point of the one Month Bank Bill Swap Rate
as published by the Australian Financial Markets
Association (or its successor) for the Business Day
immediately prior to the 21st day of the previous
Month; or
(B) if that rate is no longer published, the rate will be an
appropriate equivalent rate determined by Aurizon
Network, acting reasonably; and
(iv) for the period commencing on the date when the Access
Charges used to calculate the applicable difference in
accordance with clause 6.1(a)(iii)(A) were due and payable
and ending on the date when the Adjustment Charge is to be
due and payable,
provided that if Aurizon Network is required to reimburse an
Adjustment Charge, then no interest will be calculated to the extent
that the Access Holder (or, if applicable, Train Operator) has not paid
the original Access Charge to which the Adjustment Charge relates.
6.2 Approval of Adjustment Charges
(a) Aurizon Network:
(i) may, if it submits a Reference Tariff variation under
clause 5.1 and that variation is proposed to apply or take
effect on a date prior to the date on which the QCA will
approve the variation; or
(ii) must, if:
(A) the QCA approves a Reference Tariff variation
under clause 5.1 and that variation applies or takes
effect on a date prior to the date on which the QCA
approves the variation (and subject to
clause 6.2(a)(i)); or
(B) this Undertaking specifies that a Reference Tariff is
applicable or effective from a date prior to the date
on which that Reference Tariff was approved by the
QCA,
submit to the QCA proposed Adjustment Charges.
(b) Where Aurizon Network submits proposed Adjustment Charges to the
QCA under clause 6.2(a):
(i) Aurizon Network’s submission must, without limitation:
(A) identify, subject to clause 6.3(a), the Access
Holders (or, if applicable, Train Operator) in respect
of whom the proposed Adjustment Charges are to
be applied;
(B) set out the proposed Adjustment Charges for each
Access Holder (or, if applicable, Train Operator)
including details of how those proposed Adjustment
Charges were calculated;
(C) indicate the Billing Period(s) in respect of which the
proposed Adjustment Charges are to be applied;
and
(D) if applicable, how the proposed Adjustment
Charges are to be allocated for the purposes of
calculations under clause 4.3;
(ii) if the QCA considers it appropriate, the QCA may publish
details of Aurizon Network’s submission of proposed
Adjustment Charges and invite and consider comments from
stakeholders regarding the proposed Adjustment Charges;
and
(iii) the QCA must approve:
(A) the Access Holders (and, if applicable, Train
Operators) in respect of whom the Adjustment
Charges are to apply;
(B) the Adjustment Charges that are to apply to each
Access Holder (and, if applicable, Train Operator);
(C) the Billing Period(s) in respect of which the
Adjustment Charges will be applied; and
(D) if applicable, how the Adjustment Charges must be
allocated for the purposes of calculations under
clause 4.3,
if the proposed Adjustment Charges submitted by Aurizon
Network (excluding any interest component) constitute no
more of a recovery or no less of a reimbursement of any
under or over recovery of Access Charges by Aurizon
Network that relate to each Access Holder (or, if applicable,
Train Operator), and any interest component was calculated
under clause 6.1(b)(iii)(B).
(c) Aurizon Network must comply with an approval of the QCA given
under clause 6.2(b)(iii) or 6.2(f) including in applying the Adjustment
Charge approved for each Access Holder to the calculation of Access
Charges payable by that Access Holder (or, if applicable, Train
Operator).
(d) If the QCA refuses to approve Aurizon Network’s submission for an
Adjustment Charge, the QCA must give Aurizon Network a notice:
(i) stating the reasons for its refusal and the way in which the
QCA considers the proposed Adjustment Charge should be
amended so as to constitute (excluding any interest
component) no more of a recovery or no less of a
reimbursement of any under or over recovery of Access
Charges by Aurizon Network that relate to each Access
Holder (or, if applicable, Train Operator); and
(ii) requiring Aurizon Network to vary the proposed Adjustment
Charge in the way the QCA considers it appropriate and
resubmit the amended proposal to the QCA within thirty (30)
days of Aurizon Network receiving the notice.
(e) Aurizon Network must comply with a notice given under
clause 6.2(d).
(f) The QCA must approve a resubmitted proposal for Adjustment
Charges, if the resubmitted proposal has been amended or developed
in accordance with the QCA’s notice given under clause 6.2(d) and
the QCA is satisfied that the proposed Adjustment Charges
resubmitted by Aurizon Network (excluding any interest component)
constitute no more of a recovery or no less of a reimbursement of any
under or over recovery of Access Charges by Aurizon Network that
relate to each Access Holder (or, if applicable, Train Operator).
6.3 Application to Access Holders and Train Operators
(a) An Adjustment Charge may only apply to:
(i) an Access Holder (New Access Holder) that did not run, or
cause a Train Operator to run; or
(ii) a Train Operator (New Train Operator) that did not operate,
the Train Services to which that Adjustment Charge relates (Past
Train Services) if:
(iii) the Access Holder who ran (or caused a Train Operator to
run) or the Train Operator who operated (as applicable), the
Past Train Services no longer has (or, at the time when the
Adjustment Charges are to be applied, will have ceased to
have) a rail haulage agreement with the Customer relating to
the Past Train Services or in respect of Train Services with
the same origin and destination as the Past Train Services;
(iv) either:
(A) the New Access Holder or New Train Operator (as
applicable) has a rail haulage agreement with the
person who was the Customer referred to in
clause 6.3(a)(iii) (including that Customer’s
successors and assigns) in respect of Train
Services with the same origin and destination as
the Past Train Services; or
(B) the New Access Holder was that Customer (or is
that Customer’s successor or assign); and
(v) either:
(A) for a New Access Holder, the New Access Holder
has been granted Access Rights with the same
origin and destination as the Past Train Services; or
(B) for a New Train Operator, the New Train Operator’s
Train Operations Deed includes right to operate
Train Services with the same origin and destination
as the Past Train Services.
(b) No Adjustment Charge will apply to an Access Holder who ran the
Past Train Services if that Access Holder has, at the time when the
Adjustment Charges are to be applied, ceased to have a rail haulage
agreement with the Customer for the Past Train Services (including
that person’s successors and assigns) in respect of Train Services
with the same origin and destination as the Past Train Services
provided that with the cessation of that rail haulage agreement, the
applicable Access Rights were either relinquished or expired.
(c) For clarity:
(i) where:
(A) an Access Holder does not have a Train Operator;
and
(B) if that Access Holder had a Train Operator,
Adjustment Charges would be applied to that Train
Operator in accordance with clause 6.2(a),
any such Adjustment Charge will apply to the Access Holder;
or
(ii) where:
(A) a Past Train Service was or was entitled to be
operated under an Access Agreement by a relevant
Train Operator (Past Train Operator);
(B) there is no New Access Holder; and
(C) either the Access Holder, at the time when the
Adjustment Charges are to be applied:
(1) does not have a Train Operator under that
Access Agreement; or
(2) has a Train Operator but that person is not
the Past Train Operator,
any such Adjustment Charge will:
(D) if there is no Train Operator, apply to the Access
Holder; or
(E) otherwise, apply to the relevant Train Operator.
(d) The calculation of Access Charges under an Access Agreement must
be reviewed and varied to provide for the payment of Adjustment
Charges in respect of the relevant Access Holder (or, if applicable,
Train Operator) including:
(i) that the Access Charges payable by the Access Holder (or, if
applicable, Train Operator) must include any applicable
Adjustment Charge from time to time in relation to or in
connection with any variation of a Reference Tariff that
applies or takes effect on a past date or any Reference Tariff
that this Undertaking states is applicable or effective from a
past date; and
(ii) that an Adjustment Charge must be applied to the
calculation of the amount of the invoice for charges payable
by the Access Holder (or, if applicable, Train Operator)
under the Access Agreement for the relevant Billing Period.
7 Blackwater System – System Reference Tariff
7.1 Additional Reference Train Service criteria
In addition to clause 1.3, the Reference Train Service to which this clause 7
applies must also satisfy the following criteria:
(a) (Coal System) operates in the Blackwater System;
(b) (Operational characteristics) meets the following criteria:
(i) a maximum Comparative Length of 1709 metres, unless
operating from Minerva where it will be 1240 metres;
(ii) a maximum axle load of 26.5 tonne for a wheel configuration
consistent with M2205 loading, or otherwise generates a
loading equivalent to M220, except that Train Services
operating from Minerva will have a maximum axle load of 20
tonne – with loading in excess of this maximum axle load
dealt with in accordance with the relevant Load Variation
Table; and
(iii) uses diesel or electric traction, except operating from
Minerva where it will only use diesel traction.
(c) (Conditions of Access) where its Access Agreement has an
“Average Below Rail Transit Time Threshold” (as defined under the
relevant Standard Access Agreement) or another equivalent threshold
or performance level relating to Aurizon Network (Threshold) and
that Threshold is no less than 127%;
5 As specified in the ANZRC Railway Bridge Design Manual 1974.
(d) (Loading Facilities) uses the following Nominated Loading Facilities
and does not exceed the following Loading Times:
Nominated Loading Facilities6 Loading Time (hours) per return
trip
Yarrabee (Boonal) 3.8
Jellinbah (Boonal) 4.6
Boorgoon 3.8
Curragh 3.3
Ensham 3.2
German Creek 3.0
Gregory 3.0
Kestrel (Gordonstone) 3.3
Kinrola 3.15
Koorilgah 5.0
Minerva 2.3
Oaky Creek 2.6
Rolleston 4.3
Yongala 3.2
Lake Vermont 3.0
(e) (Unloading Facilities) uses the following Nominated Unloading
Facilities and does not exceed the following Unloading Times:
Nominated Unloading Facilities7 Unloading Time (hours) per
return trip
Barney Point 5.0
Cement Australia 6.0
Comalco Refinery 6.0
6 Diagrams showing the location of the Nominated Loading Facilities for a nominated Reference Train Service are
included in the Preliminary Information for the relevant Coal System. 7 Diagrams showing the location of the Nominated Unloading Facilities for a nominated Reference Train Service
are included in the Preliminary Information for the relevant Coal System.
Nominated Unloading Facilities7 Unloading Time (hours) per
return trip
Gladstone Power Station 4.3
Golding/RG Tanna Terminal 2.6
Queensland Alumina Ltd (QAL) 8 8.9
Stanwell Power Station 2.3
Wiggins Island Coal Export Terminal 1.59
(f) (Dwell Period) has Dwell periods not exceeding the following:
Dwell period (hours) per return trip
Inclusive of Train examination 9.2
Excluding Train examination 3.2
7.2 Reference Tariff inputs
(a) Subject to clause 7.2(c), the Reference Tariff inputs are:
Reference Tariff input
2017/18^ ($)
2018/19 ($)
2019/20 ($)
2020/21 ($)
AT1 0.93 0.95 0.97 0.99
AT2 2,187.59 2,214.28 2,241.29 2,268.64
AT3 7.71* 7.53* 7.48* 7.43*
AT4 2.62 2.57 2.55 2.61
AT5 3.31 3.26 3.26 3.26
EC 0.77 0.79 0.80 0.81
QCA Levy 0.02929 0.02965 0.03001 0.03038
* This amount must be adjusted by subtracting the System Discount under
clause 7.2(b) where the System Discount, applies to the relevant Train
Service.
^ To be updated upon QCA approval of 2015-16 revenue cap.
8 The Unloading Time for the QAL refinery represents the time the Train Service is off the Rail Infrastructure on
the relevant Private Infrastructure. 9 For services from the North Coast Line 0.7 hours.
(b) The System Discounts for Train Services to or from Nominated
Loading Facilities or Nominated Unloading Facilities are:
Nominated Unloading Facilities
System Discount ($/ntk)
2017/18 2018/19
2019/20
2020/21
Stanwell Power Station 2.70 2.64 2.62 2.60
(c) The Reference Tariff inputs referred to below in relation to a
Nominated Loading Facility replace the equivalent Reference Tariff
inputs in clause 7.2(a) for any Train Service using that Nominated
Loading Facility:
Nominated Loading Facility
Reference Tariff input
2017/18 ($)
2018/19 ($)
2019/20 ($)
2020/21 ($)
Rolleston AT3 9.00 7.82 7.73 7.43
(d) For clarity, where a Train Service operating in the Blackwater System
is a Cross System Train Service, the Reference Tariff inputs set out
above relating to that Train Service are subject to clause 2.3.
(e) The Nominal Train Payload for:
(i) a Train Service (other than a Cross System Train Service or
a Train Service referred to in clause 7.2(e)(iii)) to which the
Reference Tariff in this clause 7 applies, is a nominal nt of
8,211 tonnes;
(ii) a Cross System Train Service where the Destination System
is the Blackwater System, is a nominal nt of 8,211 tonnes;
or
(iii) a Train Service (other than a Cross System Train Service)
that has Minerva as a Nominated Loading Facility, is a
nominal nt of 5,831 tonnes.
7.3 Gtk Forecast and Allowable Revenues
Year Gtk Forecast (,000 gtk)
Allowable Revenue – AT2-4
($)
Allowable Revenue – AT5
($)
2017/181 38,500,357 411,018,335 96,614,424
2018/19 39,384,679 405,287,283 97,428,007
Year Gtk Forecast (,000 gtk)
Allowable Revenue – AT2-4
($)
Allowable Revenue – AT5
($)
2019/20 39,603,874 403,033,865 98,113,879
2020/21 39,675,500 404,497,734 98,429,832
(1) To be updated upon QCA approval of 2015-16 revenue cap.
8 Goonyella System – System Reference Tariff
8.1 Additional Reference Train Service criteria
In addition to clause 1.3, the Reference Train Service to which this clause 8
applies must also satisfy the following criteria:
(a) (Coal System) operates in the Goonyella System;
(b) (Operational characteristics) meets the following criteria:
(i) a maximum Comparative Length of 2082 metres;
(ii) a maximum axle load of 26.5 tonne for a wheel configuration
consistent with M22010
loading, or otherwise generates a
loading equivalent to M220 – with loading in excess of this
maximum axle load dealt with in accordance with the
relevant Load Variation Table; and
(iii) uses diesel or electric traction.
(c) (Conditions of Access) where its Access Agreement has an
“Average Below Rail Transit Time Threshold” (as defined under the
relevant Standard Access Agreement) or another equivalent threshold
or performance level relating to Aurizon Network (Threshold) and
that Threshold is no less than 123%;
(d) (Loading Facilities) uses the following Loading Facilities and does
not exceed the following Loading Times:
Nominated Loading Facilities11
Loading Time (hours) per return trip
Blair Athol (Clermont) 3.1
Burton 3.8
Carborough Downs 3.5
10 As specified in the ANZRC Railway Bridge Design Manual 1974.
11 Diagrams showing the location of the Nominated Loading Facilities for a nominated Reference Train Service are
included in the Preliminary Information for the relevant Coal System.
Nominated Loading Facilities11
Loading Time (hours) per return trip
Caval Ridge* 2.5
German Creek 2.9
Goonyella 3.9
Gregory 3.6
Hail Creek 2.6
Isaac Plains 3.9
Lake Vermont 3.0
Macarthur (Coppabella) 3.9
Millennium 3.0
Middlemount* 3.5
Moorvale 3.6
Moranbah North 3.6
North Goonyella 4.3
Norwich Park 3.9
Oaky Creek 3.2
Peak Downs 4.2
Riverside 4.6
Saraji 4.4
South Walker Creek 3.8
* Balloon loops for these loading facilities are Private Infrastructure
(e) (Unloading Facilities) uses the following Nominated Unloading
Facilities and does not exceed the following Unloading Times:
Nominated Unloading Facilities12
Unloading Time (hours) per return trip
Dalrymple Bay Pit 1 – 2.5
12 Diagrams showing the location of the Nominated Unloading Facilities for a nominated Reference Train Service
are included in the Preliminary Information for the relevant Coal System.
Nominated Unloading Facilities12
Unloading Time (hours) per return trip
Pit 2 – 2.5
Pit 3 – 2.0
Hay Point 2.8
(f) (Dwell Period) has Dwell periods not exceeding the following:
Dwell period (hours) per return trip
Inclusive of Train examination 8.8
Excluding Train examination 1.8
8.2 Reference Tariff inputs
(a) Subject to clause 8.2(b), the Reference Tariff inputs are:
Reference Tariff input
2017/18^ ($)
2018/19 ($)
2019/20 ($)
2020/21 ($)
AT1 0.65 0.66 0.67 0.68
AT2 1,385.97 1,402.88 1,419.99 1,437.31
AT3 5.92 5.97 6.34 6.19
AT4 1.24 1.25 1.32 1.29
AT5 2.01 2.01 2.05 2.08
EC 0.77 0.79 0.80 0.81
QCA Levy 0.02929 0.02965 0.03001 0.03038
^ To be updated upon QCA approval of 2015-16 revenue cap.
(b) The Reference Tariff inputs referred to below in relation to a
Nominated Loading Facility replace the equivalent Reference Tariff
inputs in clause 8.2(a) for any Train Service using that Nominated
Loading Facility:
Nominated Loading Facility
Reference Tariff input
2017/18 ($)
2018/19 ($)
2019/20 ($)
2020/21 ($)
Middlemount AT3 3.86 3.86 3.93 3.88
AT4 1.03 1.03 1.05 1.04
Nominated Loading Facility
Reference Tariff input
2017/18 ($)
2018/19 ($)
2019/20 ($)
2020/21 ($)
AT5 1.02 1.03 1.07 1.10
Caval Ridge AT3 4.04 4.11 4.47 4.31
AT4 0.84 0.86 0.93 0.90
AT5 1.58 1.64 1.67 1.70
(c) For clarity, where a Train Service operating in the Goonyella System
is a Cross System Train Service, the Reference Tariff inputs set out
above relating to that Train Service are subject to clause 2.3.
(d) The Nominal Train Payload for:
(i) a Train Service (other than a Cross System Train Service) to
which the Reference Tariff in this clause 8 applies; or
(ii) a Cross System Train Service where the Destination System
is the Goonyella System,
is a nominal nt of 10,055 tonnes.
8.3 Gtk Forecast and Allowable Revenues
Year Gtk Forecast (,000 gtk)
Allowable Revenue – AT2-4
($)
Allowable Revenue – AT5
($)
2017/181 39,617,676 326,651,609 77,937,299
2018/19 39,617,676 329,304,209 78,266,524
2019/20 39,528,336 347,912,440 79,517,035
2020/21 39,491,463 340,841,164 80,723,521
(1) To be updated upon QCA approval of 2015-16 revenue cap.
9 Moura System – System Reference Tariff
9.1 Additional Reference Train Service criteria
In addition to clause 1.3, the Reference Train Service to which this clause 9
applies must also satisfy the following criteria:
(a) (Coal System) operates in the Moura System;
(b) (Operational characteristics) meets the following criteria:
(i) a maximum Comparative Length of 1000 metres;
(ii) a maximum axle load of 26.5 tonne for a wheel configuration
consistent with M22013
loading, or otherwise generates a
loading equivalent to M220 – with loading in excess of this
maximum axle load dealt with in accordance with the
relevant Load Variation Table; and
(iii) uses diesel traction;
(c) (Conditions of Access) where its Access Agreement has an
“Average Below Rail Transit Time Threshold” (as defined under the
relevant Standard Access Agreement) or another equivalent threshold
or performance level relating to Aurizon Network (Threshold) and
that Threshold is no less than 130%;
(d) (Loading Facilities) uses the following Nominated Loading Facilities
and does not exceed the following Loading Times:
Nominated Loading Facilities
14
Loading Time (hours) per return trip
Baralaba 4.9
Boundary Hill 3.4
Dunn Creek (Callide) 4.2
Moura 3.6
(e) (Unloading Facilities) uses the following Nominated Unloading
Facilities and does not exceed the following Unloading Times:
Nominated Unloading Facilities
15
Unloading Time (hours) per return trip
Barney Point 5.0
Cement Australia 4.3
Comalco Refinery 6.0
Gladstone Power Station 4.3
Golding/RG Tanna Terminal 2.6
13 As specified in the ANZRC Railway Bridge Design Manual 1974.
14 Diagrams showing the location of the Nominated Loading Facilities for a nominated Reference Train Service are
included in the Preliminary Information for the relevant Coal System. 15
Diagrams showing the location of the Nominated Unloading Facilities for a nominated Reference Train Service are included in the Preliminary Information for the relevant Coal System.
Nominated Unloading Facilities
15
Unloading Time (hours) per return trip
Queensland Alumina Ltd (QAL)
16
8.9
Wiggins Island Coal Export Terminal
1.517
(f) (Dwell Period) has Dwell periods not exceeding the following:
Dwell period (hours)per return trip
Inclusive of Train examination 6.2
Excluding Train examination 3.2
9.2 Reference Tariff inputs
(a) The Reference Tariff inputs are:
Reference Tariff input 2017/18^ ($)
2018/19 ($)
2019/20 ($)
2020/21 ($)
AT1 1.73 1.77 1.80 1.83
AT2 655.26 663.26 671.35 679.54
AT3 11.57 11.81 12.13 12.29
AT4 1.88 1.92 1.97 2.00
QCA Levy 0.02929 0.02965 0.03001 0.03038
^ To be updated upon QCA approval of 2015-16 revenue cap.
(b) The Reference Tariff inputs referred to below in relation to a
Nominated Loading Facility replace the equivalent Reference Tariff
inputs in clause 9.2(a) for any Train Service using that Nominated
Loading Facility:
16 The Unloading Time for the QAL refinery represents the time the Train Service is off the Rail Infrastructure on
the relevant Private Infrastructure. 17
For services from the North Coast Line 0.7 hours.
Nominated Loading Facility
Reference Tariff input
2017/18 ($)
2018/19 ($)
2019/20 ($)
2020/21 ($)
Baralaba1 AT3 - - - –
(1) Only those Train Services from this loading facility that terminate at
Wiggins Island Coal Export Terminal are subject to this Reference Tariff
input.
(c) For clarity, where a Train Service operating in the Moura System is a
Cross System Train Service, the Reference Tariff inputs set out above
relating to that Train Service are subject to clause 2.3.
(d) The Nominal Train Payload for:
(i) a Train Service to which the Reference Tariff in this clause 9
applies; or
(ii) a Cross System Train Service where the Destination System
is the Moura System,
is a nominal nt of 6,269 tonnes.
9.3 Gtk Forecast and Allowable Revenues
Year Gtk Forecast (,000 gtk)
Allowable Revenue – AT2-4 ($)
2017/181 2,796,252
41,501,336
2018/19 2,796,252 42,327,201
2019/20 2,796,252 43,447,347
2020/21 2,796,252 44,022,880
(1) To be updated upon QCA approval of 2015-16 revenue cap.
10 Newlands System – System Reference Tariff
10.1 Additional Reference Train Service criteria
In addition to clause 1.3, the Reference Train Service to which this clause 10
applies must also satisfy the following criteria:
(a) (Coal System) operates in the Newlands System;
(b) (Operational characteristics) meets the following criteria:
(i) a maximum Comparative Length of 1402 metres;
(ii) a maximum axle load of 26.5 tonne for a wheel configuration
consistent with M22018
loading, or otherwise generates a
loading equivalent to M220 – with loading in excess of this
maximum axle load dealt with in accordance with the
relevant Load Variation Table; and
(iii) uses diesel traction;
(c) (Conditions of Access) where its Access Agreement has an
“Average Below Rail Transit Time Threshold” (as defined under the
relevant Standard Access Agreement) or another equivalent threshold
or performance level relating to Aurizon Network (Threshold) and
that Threshold is no less than 160%;
(d) (Loading Facilities) uses the following Nominated Loading Facilities
and does not exceed the following Loading Times:
Nominated Loading Facilities
19
Loading Time (hours) per return trip
McNaughton 1.85
Newlands 2.05
Sonoma 2.4
(e) (Unloading Facilities) uses the following Nominated Unloading
Facilities and does not exceed the following Unloading Times:
Nominated Unloading Facilities
20
Unloading Time (hours) per return trip
Abbot Point 2.05
(f) (Dwell Period) has Dwell periods not exceeding the following:
Dwell period (hours)per return trip
Inclusive of Train examination 6.4
Excluding Train examination 2.4
10.2 Reference Tariff inputs
(a) The Reference Tariff inputs are:
18 As specified in the ANZRC Railway Bridge Design Manual 1974.
19 Diagrams showing the location of the Nominated Loading Facilities for a nominated Reference Train Service are
included in the Preliminary Information for the relevant Coal System. 20
Diagrams showing the location of the Nominated Unloading Facilities for a nominated Reference Train Service are included in the Preliminary Information for the relevant Coal System.
Reference Tariff input
2017/18^ ($)
2018/19 ($)
2019/20 ($)
2020/21 ($)
AT1 1.80 1.84 1.87 1.91
AT2 292.98 296.55 300.17 303.83
AT3 11.31 12.15 12.84 13.74
AT4 1.62 1.74 1.83 1.96
QCA Levy 0.02929 0.02965 0.03001 0.03038
^ To be updated upon QCA approval of 2015-16 revenue cap.
(b) For clarity, where a Train Service operating in the Newlands System
is a Cross System Train Service, the Reference Tariff inputs set out
above relating to that Train Service are subject to clause 2.3.
(c) The Nominal Train Payload for:
(i) a Train Service (other than a Cross System Train Service) to
which the Reference Tariff in this clause 10 applies; or
(ii) a Cross System Train Service where the Destination System
is the Newlands System,
is a nominal nt of 6,871 tonnes.
10.3 Gtk Forecast and Allowable Revenues
Year Gtk Forecast (,000 gtk)
Allowable Revenue – AT2-4 ($)
2017/181 2,105,250 30,502,827
2018/19 2,105,250 32,727,070
2019/20 2,105,250 34,533,118
2020/21 2,105,250 36,925,763
(1) To be updated upon QCA approval of 2015-16 revenue cap.
11 Goonyella to Abbot Point System – System
Reference Tariff
11.1 Additional Reference Train Service criteria
In addition to clause 1.3, the Reference Train Service to which this clause 11
applies must also satisfy the following criteria:
(a) (Coal System) operates in the Goonyella to Abbot Point System;
(b) (Operational characteristics) meets the following criteria:
(i) a maximum Comparative Length of 1402 metres;
(ii) a maximum axle load of 26.5 tonne for a wheel configuration
consistent with M22021
loading, or otherwise generates a
loading equivalent to M220 – with loading in excess of this
maximum axle load dealt with in accordance with the
relevant Load Variation Table; and
(iii) uses diesel traction.
(c) (Conditions of Access) where its Access Agreement has an
“Average Below Rail Transit Time Threshold” (as defined under the
relevant Standard Access Agreement) or another equivalent threshold
or performance level relating to Aurizon Network (Threshold) and
that Threshold is no less than 160%;
(d) (Loading Facilities) uses the following Nominated Loading Facilities
and does not exceed the following Loading Times:
Nominated Loading Facilities22
Loading Time (hours) per return trip
Riverside 3.0
Peak Downs 3.0
Lake Vermont 2.05 (estimate)23
Blair Athol (Clermont) 2.04 (estimate)24
Middlemount* 2.75
Caval Ridge* 1.85
21 As specified in the ANZRC Railway Bridge Design Manual 1974.
22 Diagrams showing the location of the Nominated Loading Facilities for a nominated Reference Train Service are
included in the Preliminary Information for the relevant Coal System.
24
This is an estimate of loading time for this Loading Facility. Aurizon will review this loading time in accordance with the relevant Access Agreement. A variation from the loading time will not result in the Train Service being considered not to be a Reference Train Service until after the loading time is reviewed in accordance to the relevant Access Agreement.
* Balloon loops for these loading facilities are Private Infrastructure.
(e) (Unloading Facilities) uses the following Nominated Unloading
Facilities and does not exceed the following Unloading Times:
Nominated Unloading Facilities25
Unloading Time (hours) per return trip
Abbot Point 2.05
(f) (Dwell Period) has Dwell periods not exceeding the following:
Dwell period (hours)per return trip
Inclusive of Train examination 7.35 per consist every 20 days
Excluding Train examination 1.35
11.2 Reference Tariff inputs
(a) The Reference Tariff inputs are:
Reference Tariff input
2017/18^ ($)
2018/19 ($)
2019/20 ($)
2020/21 ($)
AT1 1.45 1.48 1.51 1.54
AT2 13,600.69 13,766.62 13,934.57 14,104.57
AT3 1.93
1.91 1.76 1.77
AT4 4.59
3.86 3.64 3.50
QCA Levy 0.02929 0.02965 0.03001 0.03038
^ To be updated upon QCA approval of 2015-16 revenue cap.
(b) The Nominal Train Payload for:
(i) a Train Service to which the Reference Tariff in this
clause 11 applies; or
(ii) a Cross System Train Service where the Destination System
is the Goonyella to Abbot Point System,
is a nominal nt of 6,871 tonnes.
25 Diagrams showing the location of the Nominated Unloading Facilities for a nominated Reference Train Service
are included in the Preliminary Information for the relevant Coal System.
11.3 Gtk Forecast and Allowable Revenues
Year Gtk Forecast (,000 gtk)
Allowable Revenue – AT2-4 ($)
2017/181 9,673,950 143,042,517
2018/19 10,078,367 141,915,514
2019/20 10,078,367 137,907,936
2020/21 10,078,367 136,324,202
(1) To be updated upon QCA approval of 2015-16 revenue cap.
12 Transitional provisions – Monthly System Forecasts
for 2001 Undertaking Access Agreements
(a) This clause 12 sets out Monthly System Forecasts for the Blackwater
System and Newlands System26
that are to be used as the ‘System
Forecasts’ of gtk for the purposes of:
(i) Access Agreements; and
(ii) New Access Agreements where the relevant Old Access
Agreement was,
executed or renewed during the term of the 2001 Undertaking
including in relation to the calculation of “VTP” and “IATP” for Take or
Pay charges.
(b) For clarity:
(i) the Monthly System Forecasts for a Coal System are based
on the Gtk Forecast for the System Reference Tariff for that
Coal System. Changes to the Gtk Forecast for a System
Reference Tariff will affect the Monthly System Forecast for
that Coal System; and
(ii) any process, obligation or right to vary a Gtk Forecast for a
System Reference Tariff for a Coal System under this
Undertaking must also include any consequential variation to
the Monthly System Forecast for that Coal System under this
clause 12.
26 Clause 12 does not apply in relation to the Goonyella System and the Moura System as there are no longer any
Access Agreements, or New Access Agreements where the relevant Old Access Agreement was, executed or renewed during the term of the 2001 Undertaking.
Blackwater System
Month System Gtk (,000 gtk)
Month System Gtk (,000 gtk)
Jul-18 3,349,644 Jul-20 3,445,653
Aug-18 3,472,781 Aug-20 3,572,320
Sep-18 3,275,179 Sep-20 3,369,054
Oct-18 3,343,674 Oct-20 3,439,512
Nov-18 3,254,327 Nov-20 3,347,604
Dec-18 3,241,758 Dec-20 3,334,675
Jan-19 2,946,713 Jan-21 3,031,173
Feb-19 2,431,710 Feb-21 2,501,408
Mar-19 3,086,038 Mar-21 3,174,492
Apr-19 3,185,622 Apr-21 3,276,930
May-19 3,406,658 May-21 3,504,302
Jun-19 3,506,253 Jun-21 3,606,751
Jul-19 3,426,583 Jul-21 3,451,885
Aug-19 3,552,548 Aug-21 3,578,780
Sep-19 3,350,407 Sep-21 3,375,147
Oct-19 3,420,475 Oct-21 3,445,732
Nov-19 3,329,076 Nov-21 3,353,658
Dec-19 3,316,219 Dec-21 3,340,706
Jan-20 3,014,397 Jan-22 3,036,656
Feb-20 2,487,564 Feb-22 2,505,932
Mar-20 3,156,922 Mar-22 3,180,233
Apr-20 3,258,793 Apr-22 3,282,857
May-20 3,484,907 May-22 3,510,640
Month System Gtk (,000 gtk)
Month System Gtk (,000 gtk)
Jun-20 3,586,788 Jun-22 3,613,274
Newlands System
Month System Gtk (,000 gtk)
Month System Gtk (,000 gtk)
Jul-18 199,278 Jul-20 199,278
Aug-18 186,054 Aug-20 186,054
Sep-18 184,934 Sep-20 184,934
Oct-18 183,435 Oct-20 183,435
Nov-18 186,169 Nov-20 186,169
Dec-18 163,855 Dec-20 163,855
Jan-19 179,664 Jan-21 179,664
Feb-19 158,807 Feb-21 158,807
Mar-19 160,405 Mar-21 160,405
Apr-19 152,725 Apr-21 152,725
May-19 177,286 May-21 177,286
Jun-19 172,637 Jun-21 172,637
Jul-19 199,278 Jul-21 199,278
Aug-19 186,054 Aug-21 186,054
Sep-19 184,934 Sep-21 184,934
Oct-19 183,435 Oct-21 183,435
Nov-19 186,169 Nov-21 186,169
Dec-19 163,855 Dec-21 163,855
Jan-20 179,664 Jan-22 179,664
Feb-20 158,807 Feb-22 158,807